Singapore could slip into a technical recession in the second half of 2019 as full-year growth projections is being relooked.

The best case scenario is that the Singapore economy merely grows slower than initially thought.

The worst case scenario is that a real recession is on its way in 2020.

These were the facts reported by CNA, quoting analysts keeping a close watch on the Singapore economy.

What is a technical recession?

A technical recession is defined as two straight quarters of quarter-on-quarter contraction.

It could come to pass in the third quarter of 2019.

The current projections are suggesting between zero and negative 0.5 percent quarter-on-quarter growth in the three months to September 2019.

Revision of numbers

The current 2019 growth forecast of 1.5 to 2.5 percent is being reviewed downward by the Ministry of Trade and Industry (MTI) and the Monetary Authority of Singapore (MAS).

This was announced by Singapore's central bank chief Ravi Menon on Thursday, June 27

The odds are higher now for the official growth estimate to fall below the lower end of the forecast range.

In May 2019, MTI narrowed the original forecast to 1.5 to 2.5 percent gross domestic product (GDP) growth.

It was 1.5 to 3.5 percent initially.

Another revision so soon suggests a tempering of expectations.

Will Singapore economy still experience positive growth?

Singapore's overall growth could end up at 0.5 percent for 2019.

The state of the global economy has been deteriorating since May, with the breakdown of US-China trade negotiations.

The economy grew by a slower pace in the first quarter of 2019.

At merely 1.2 percent year-on-year, it is the lowest growth in nearly a decade.

Recovery uncertain

Optimism about second-half 2019 recovery is getting shelved, with the U.S.-China trade war persisting with no end in sight.

Moreover, the full impact of the trade war might not even have been realised yet.

What has declined in Singapore?

Lackluster economic indicators include:

- Double-digit declines in Singapore’s non-oil domestic exports

- Worse than expected industrial output in May.

A strong rebound in the second half of 2019 will be needed to make up for growth.

All eyes on trade war outcome

A shallow technical recession could, therefore, be in the works.

But for the full year, there can still be growth overall.

The G20 summit happening in the last weekend of June 2019 might bring some respite if there is a breakthrough in trade talks between the U.S. and China.

If the trade tensions persist into 2020, that is when recessionary risks heightens.

An all-out trade war could lead to a real recession.

That is when labour market conditions weaken with a pullback in spending and investments.