| After a better-than-expected start to 2025, the government is warning of a growing risk that the economy may slip into its first technical recession since the pandemic. Beh Swan Gin, permanent secretary at the trade ministry, emphasized that such a contraction — defined as two consecutive quarters of contraction — "doesn't necessarily equate to a full-blown economic recession." The government maintained its full-year growth forecast at a cautious 0% to 2%. As the impact of the US-led tariff escalation begins to bite, Singapore is the first Southeast Asian country to flag the risk of a technical recession, an event that has only happened twice in the past 20 years — at the start of the Covid-19 pandemic in 2020, and during the global financial crisis, when the city-state had four straight quarterly contractions beginning in June 2008. The newly re-elected government of Prime Minister Lawrence Wong is already spending billions of dollars in subsidies and handouts to help households cope with the rising cost of living and create more jobs. But with such a high dependence on global trade, the nation's economic path this year is likely to be dictated by the unpredictable trade battle between the US and China. So how to gauge if the nation is in a recession, even a technical one? Well, Thursday's data did show some encouraging signs. Retail trade stabilized after three straight quarters of contraction, largely thanks to a pickup in vehicle sales. The first signs of household caution would be reflected in car certificate of entitlement prices, which is still holding firm above S$100,000 ($77,845) even for the small car category, said Khoon Goh, head of Asia research at ANZ Bank. The "weakest services link" was accommodation, which fell back into contraction, dragged down by a drop in lettings in parts of the hotel industry, said Selena Ling, chief economist at OCBC. Another bleak spot was food & beverages services, which extended its losing streak for a fourth straight quarter amid lower sales volumes at food courts and restaurants. One area to watch is whether a slowdown would further put the brakes on the nation's hot property market, a sector that has so far withstood both government cooling efforts and economic headwinds. That's in contrast to the situation in Hong Kong, where years of high interest rates and a property downturn have resulted in a flurry of mansion fire sales by some of the Chinese city's richest families. —Swati Pandey | 
