Credit Brief on Singapore SMEs Q4 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 decreased during Q4, from 30.51bps in September to 27.23bps in December. The credit profile of Singapore SMEs improved despite the sluggish GDP growth at 0.8% in Q4 2019 based on advance estimates from the Ministry of Trade and Industry (MTI).
According to the survey conducted by the Singapore Business Federation and DP Information Group, Singapore SMEs softened their business expectations amid the protracted US-China trade war. External facing sectors continued to face business challenges amid an uncertain global economy, with the outlook among commerce/ trading SMEs reaching the lowest since Q1 2017. Domestic facing sectors were also negatively affected by the trade war with the retail/ F&B sector registering the most significant decline in turnover expectations. Since the business environment in the first half of this year might continue to stay depressed, it is wise for companies to take a watch-and-wait approach.
Lastly, with economic uncertainties and global headwinds now the new normal, SMEs need to continue to explore new markets which are now accessible with new Free Trade Agreements (FTA) in place such as the EU-Singapore FTA and continue to invest in business transformation efforts to strengthen their capabilities so they can be ready to ride on the recovery.