Credit Brief on Singapore SMEs Q3 2019
This is a quarterly report jointly published by the CRI at the Risk Management Institute of National University of Singapore and Validus Capital. Read the full report here →
Overall, the NUS-CRI 1-year PD increased during Q3, from 28.40bps in June to 30.54bps in September. The weaker credit profile of Singapore SMEs is line with the sluggish GDP growth at 0.1% in Q3 2019 based on advance estimates from the Ministry of Trade and Industry (MTI).
According to the survey conducted by the Singapore Business Federation and Experian, Singapore SMEs show greater caution amid trade tensions. The manufacturing sector has a more pessimistic outlook compared to the other sectors due to being hit by the declining global demand. Except the construction sector, all sectors are expecting a decrease in growth outlook.
To tackle the headwinds, SMEs are urged to adjust their internal strategies to protect themselves against sustained challenges in their business environment. The Singapore government has also reassured the SMEs that they are ready to step in to boost the economy, if needed.
Despite the more pessimistic outlook, SMEs in Singapore could take advantage of the downturn to improve their capabilities so they can be ready for the upturn.