year. however, it fell to 51. 6 in may. this is perhaps an early signal that a prolonged period of erosion in global manufacturing activity and investment will eventually have some knock - on effects on services. the bottom line : consumption and services will provide some buffer to global growth but will not be entirely immune to persistent weakness in trade and corporate investment. singapore economy the singapore economy is being clearly affected by the global slowdown in manufacturing, trade, and investment. the economy grew by 1. 2 % in q1 2019, compared to 3. 1 % for full - year 2018. recent indicators suggest that growth in q2 could be lower than in q1. non - oil domestic exports have contracted by 9. 3 % since the beginning of this year. the manufacturing sector is in a downturn. gdp growth for the year as a whole is likely to be weaker than earlier envisaged. mti and mas are reviewing the 1. 5 - 2. 5 % forecast range for this year ’ s gdp growth. growth in the first half of the year is looking to be quite weak, particularly in the trade - related sectors. currently, the full - year forecast is premised on the economy stabilising in the third quarter of 2019, with a modest pickup thereafter. but the strength of this pick - up, given the softer external environment and ongoing trade conflict, is unlikely to offset the weakness in the first half. and downside risks have clearly increased. as with the global economy, it is important to look beyond the headline growth numbers and assess the composition of growth in the domestic economy. last year, singapore ’ s gdp growth was driven by two engines – the trade - related cluster and modern services cluster – with domestic industries flat. the trade - related cluster – manufacturing, wholesale trade, transport and storage – grew 4. 3 % and contributed 55 % to overall gdp growth. the modern services cluster – financial, information and communications, and professional services – also grew 4. 3 % and contributed 40 % to overall gdp growth. growth in the domestic industries cluster – construction, retail and f & b, health and education services – was negligible, mostly weighed down by the slump in construction. this year, the trade - related cluster is decelerating, modern services is holding up, and the domestic industries cluster is gradually recovering. 4 / 11 bis central bankers'speeches the trade - related cluster will continue to face the full brunt of the maturing of the

jacqueline loh : unlocking insurance linked securities growth through asia opening speech by ms jacqueline loh, deputy managing director of the monetary authority of singapore, at the artemis ils asia 2018 conference, singapore, 12 july 2018. * * * distinguished guests, ladies and gentlemen, a very good morning to all of you. 2 i am very pleased to be here today at the artemis ils asia 2018 conference. the third time that it is held in singapore, the conference is a good market barometer that insurance - linked securities ( ils ) are becoming more prominent in asia, and prospects are bright for the coming years. alternative capital becomes mainstream 3 we are gathering here at an exciting time for the global insurance - linked securities industry, with alternative capital being an increasingly important part of an insurer ’ s risk transfer toolkit. born from a need to bring additional loss absorbing capacity following the devastating disasters in the mid - 1990s – hurricane andrew and the northridge earthquake in california – the development of the ils market has been a remarkable story of innovation. 4 twenty years later, the global ils market continues to thrive. emerging from the him ( harvey, irma and maria ) hurricane losses, earthquakes in mexico and wildfires in california, 2017 has been widely billed as the global financial crisis equivalent for the ils market, as it registered the largest losses in more than a decade. yet, the ils market has remained largely resilient. growth remains strong in 2018, with issuance of catastrophe bonds the most prevalent type of ils, more than doubling compared to the same period last year. ils rates have stabilised after having risen post these disasters, and subsequently dipping with the influx of capital. catastrophe bond managers have continued to launch new ils funds in response to strong demand from investors. today, the ils market has grown to the point where it now provides 15 % of global catastrophe reinsurance capacity. 5 let me highlight 2 key reasons why ils has been growing over the years : a. first, it offers sponsors a viable alternative to enhance risk transfer programs. ils provides diversification of the source of risk capital, multi - year coverage, and also competitive rates compared to traditional reinsurance. b. second, there is strong demand from investors given ils ’ low correlation with other asset classes, and low volatility. to illustrate, the swiss re global cat bond index has an annual volatility under 3 % 1, much below the 15 %