Monetary Authority of Singapore (MAS)'s chief has warned that risks to the global growth outlook have increased significantly due to an intensifying international trade row.
The rising prospect of a rapid acceleration in inflation is also heightening the risk.
MAS Managing Director Ravi Menon said at a news conference after the release of the Singapore central bank's annual report on Wednesday, reports Reuters.
Menon said that the baseline forecast for Singapore is for the economy to continue expanding and inflation to pick up gradually.
The MAS "does not aim to pre-empt tail risk (least likely) scenarios", he affirmed.
"Tail risks to global growth have grown significantly over the last six months," he observed.
"The world has clearly moved from trade tension to trade conflict," the central bank chief cautioned.
"If this escalates into a trade war, all three engines of global growth - manufacturing, trade and investment - will stall," he said.
The comments come in the wake of renewed threats by US administration against global trade partners and President Trump's warning to take action against the WTO.
Menon said the consequences of a full-out trade war and disruptions to the WTO (World Trade Organisation) process will be "quite dire."
"There is little question about it," he said.
"The paralysis of trade flows will not stop at just trade, it will extend to investment, confidence across a range of economic activities," he further warned.
"While the central prognosis for the Singapore economy this year remains intact, spillovers from global trade conflicts bear close watching," he added.
