Singapore stagflation : May 2008 exports fell most in 17 months; inflation at 26-year highs
This article belongs to the Singapore stagflation watch story arc.
Singapore's exports fell the most in 17 months in May [2008] as the island's manufacturers shipped fewer electronics and other goods to the US and Europe. Non-oil domestic exports dropped 10.5% from a year earlier, the trade promotion agency said today [17 Jun 2008]. Manufacturers across Asia face easing demand amid slowing growth in the US, the region's largest overseas market. Pharmaceutical shipments dropped 48.5% in May from a year earlier, while electronics shipments slipped 8.5%, the 16th consecutive drop. Semiconductor shipments dropped 12.6%. Sales to the European Union fell 28% in May and US shipments dropped 22.3%.
- The Singapore economy continues to be confronted by stagflation as economic weakness persists and shows signs of actually worsening, while inflation continues to run at 26-year highs. As I have commented earlier, this is as classic as it gets regarding the definition of stagflation : stagnant or slowing economic growth in a time of rising inflation.
Sure, biotech manufacturing is subject to some "lumpiness" as equipment needs to be cleaned and re-setup for the next batch of medicines, but a 48.5% drop year-on-year? This is as good as "falling off the cliff", a sinking sensation that many in the peakoiler community are very, very familiar with. And electronics? 16 consecutive drops in 16 months. They could be trying for some kind of record here, together with semiconductors. A very ugly picture, especially given that inflation is still ongoing, and crude oil continues to set new record highs regularly.
This is the kind of situation that can lead to restlessness amongst the population, and in extreme cases descend into disorder and chaos and in fact it already has in some countries. You can be very sure that the government has got to be very concerned about it. Meanwhile, as an individual, in order to hedge against slowing economic growth, you might want to look into getting a job in a traditionally defensive sector, such as government, military, education, healthcare, and such. And as an investor, in order to hedge against inflation, what you can do is to buy into commodities, hold on to them, and sit tight. Gold and oil and uranium and food and other resources are going higher. Much, much higher. We ain't seen nothing yet.
Singapore CPI inflation rate for May 2008 continues at 26-year high of 7.5%
Singapore's consumer prices rose at a slower-than-expected pace last month [May 2008], reducing the need for further currency gains to rein in inflation. The consumer price index [CPI] jumped 7.5% from a year earlier, matching April's 26-year high record, the Department of Statistics said [23 Jun 2008]. The Monetary Authority of Singapore [MAS] had forecast a 5-6% inflation rate for 2008. The central bank has allowed its currency to strengthen against the US dollar, saying the exchange rate remains its most effective tool to fight inflation.
- The Singapore inflation rate is reportedly stabilizing and analysts are already predicting that it will come down in the second half of 2008. Singapore M3 money supply figures also appear to be stabilizing around the 12-13% level in the past half year, down from a high of 23.62% in 2007. But the money supply growth rate is only half the story - the other half is its relationship to the growth of available goods and services in the economy. For the inflation rate to be stable, economic growth has to at least keep up with money supply growth. With a looming global economic slowdown and imminent worldwide recession, the economic growth factor is the big wildcard.
Gold and crude oil prices may have paused from breaking new all-time record highs for the time being, but the inflationary storm is far from over as yet. We may only be passing through the eye of the hurricane here - just when people start to get lulled into complacency, the winds of inflation could well pick up with renewed force - perhaps even stronger than ever. We need to remain vigilant against inflation. This is no time to let down your guard yet.
lionnoisy,
You are one of the biggest moron in sgForums, I stand by this statement.
The Lion in the Wizard of Oz was a coward, but you are like a two in one, Scarecrow and Lion all rolled into one.


Tx for nice pics.
Oz banks and non--banks are looking high and low for funds.
In the June quarter ,Oz financial corporations(incl banks and non--banks)
received net funds of A$20.8(3.4+11.1+6.3) from gavaman ,
non--financial corps and foreign sources.
This is in sharp contrast of net flow of funds A$13.5 only
from the above 3 sources(4.5+64.1-55.1)in the 2007/2008 financial year
ends at June 2008!!

http://www.abs.gov.au/AUSSTATS/[email protected]/Latestproducts/5232.0Main%20Features2Jun%202008?opendocument&tabname=Summary&prodno=5232.0&issue=Jun%202008&num=&view=
http://www.ausstats.abs.gov.au/ausstats/subscriber.nsf/0/BC69FBC0DBD1B27BCA2574CF0013F7F7/$File/52320_jun%202008.pdf
RBA took billionS of RMBA INTO BALANCE sheet
64 billions----6% of GDP!!
Besides the total A$8 billions acquisitions in 2 purchses ,
few pple knows RBA bought another A$58 b of RMBA!!
In such circumstances, the RBA would be prepared to conduct repurchase agreements in RMBS backed by mortgages originated by the institution undertaking the repo (so-called ‘self securitisations’). To date, 11 institutions have created these self-securitisations, with the total stock of these currently
standing at around $58 billion.
FINANCIAL STABILITY REVIEW by Reserve Bank of Australia--Sept 2008,
page 31 of 74,
www.rba.gov.au
http://www.theaustralian.news.com.au/story/0,25197,24409158-20142,00.html
http://www.news.com.au/business/story/0,27753,24403645-462,00.html
pl refer to my posting in page 1 of this thread.
So it can explains the assets and liabilities of RBA increases damn fast!!
mm

nnnn
USA and Oz is just a twin brothers.
The economic data looks very alike.
http://www.debtdeflation.com/blogs/
below--Australia
I have seen else where that USA is almost the same!!
Financial assest vs liability of RBA,banks and non--banks
u can go to DOWNLOAD from here
http://www.abs.gov.au/AUSSTATS/[email protected]/Latestproducts/5232.0Main%20Features2Jun%202008?opendocument&tabname=Summary&prodno=5232.0&issue=Jun%202008&num=&view=
Millions dollars question--
what will happen to FX rate if Oz $$ deposit interest rate comes
down again?
100 Percentage likelihood of a 0.5% rate cut at the November RBA meeting
How is this calculated?*
http://www.news.com.au/dailytelegraph/business/
http://www.asx.com.au/sfe/targetratetracker.htm

sources
,,,
Singapore stagflation : May 2008 exports fell most in 17 months; inflation at 26-year highs
<!-- ADDTHIS BUTTON BEGIN --> <!-- ADDTHIS BUTTON END -->
This article belongs to the Singapore stagflation watch story arc.
Singapore's exports fell the most in 17 months in May [2008] as the island's manufacturers shipped fewer electronics and other goods to the US and Europe. Non-oil domestic exports dropped 10.5% from a year earlier, the trade promotion agency said today [17 Jun 2008]. Manufacturers across Asia face easing demand amid slowing growth in the US, the region's largest overseas market. Pharmaceutical shipments dropped 48.5% in May from a year earlier, while electronics shipments slipped 8.5%, the 16th consecutive drop. Semiconductor shipments dropped 12.6%. Sales to the European Union fell 28% in May and US shipments dropped 22.3%.
- The Singapore economy continues to be confronted by stagflation as economic weakness persists and shows signs of actually worsening, while inflation continues to run at 26-year highs. As I have commented earlier, this is as classic as it gets regarding the definition of stagflation : stagnant or slowing economic growth in a time of rising inflation.
Sure, biotech manufacturing is subject to some "lumpiness" as equipment needs to be cleaned and re-setup for the next batch of medicines, but a 48.5% drop year-on-year? This is as good as "falling off the cliff", a sinking sensation that many in the peakoiler community are very, very familiar with. And electronics? 16 consecutive drops in 16 months. They could be trying for some kind of record here, together with semiconductors. A very ugly picture, especially given that inflation is still ongoing, and crude oil continues to set new record highs regularly.
This is the kind of situation that can lead to restlessness amongst the population, and in extreme cases descend into disorder and chaos and in fact it already has in some countries. You can be very sure that the government has got to be very concerned about it. Meanwhile, as an individual, in order to hedge against slowing economic growth, you might want to look into getting a job in a traditionally defensive sector, such as government, military, education, healthcare, and such. And as an investor, in order to hedge against inflation, what you can do is to buy into commodities, hold on to them, and sit tight. Gold and oil and uranium and food and other resources are going higher. Much, much higher. We ain't seen nothing yet.
Singapore CPI inflation rate for May 2008 continues at 26-year high of 7.5%
Singapore's consumer prices rose at a slower-than-expected pace last month [May 2008], reducing the need for further currency gains to rein in inflation. The consumer price index [CPI] jumped 7.5% from a year earlier, matching April's 26-year high record, the Department of Statistics said [23 Jun 2008]. The Monetary Authority of Singapore [MAS] had forecast a 5-6% inflation rate for 2008. The central bank has allowed its currency to strengthen against the US dollar, saying the exchange rate remains its most effective tool to fight inflation.
- The Singapore inflation rate is reportedly stabilizing and analysts are already predicting that it will come down in the second half of 2008. Singapore M3 money supply figures also appear to be stabilizing around the 12-13% level in the past half year, down from a high of 23.62% in 2007. But the money supply growth rate is only half the story - the other half is its relationship to the growth of available goods and services in the economy. For the inflation rate to be stable, economic growth has to at least keep up with money supply growth. With a looming global economic slowdown and imminent worldwide recession, the economic growth factor is the big wildcard.
Gold and crude oil prices may have paused from breaking new all-time record highs for the time being, but the inflationary storm is far from over as yet. We may only be passing through the eye of the hurricane here - just when people start to get lulled into complacency, the winds of inflation could well pick up with renewed force - perhaps even stronger than ever. We need to remain vigilant against inflation. This is no time to let down your guard yet.
Singapore economy stuck in mud : inflation rising, M3 falling, GDP crashing - the stagflation formula
This article belongs to the Singapore stagflation watch story arc.
mas.gov.sg -> mas.gov.sg (pdf) :
The latest Singapore money supply figures are out. For the month of Dec 2007, the Singapore M3 money supply growth has continued to slow, and it now stands at 14.14% year-on-year. However, real inflation shows no signs of abating because we are at the point where economic growth is falling (crashing) faster than M3 money supply growth is slowing. The Singapore economy is thus stuck in mud, and the stagflation formula goes as follows :
14.14% M3 growth - (-4.8% economic growth) = 18.94% real inflation rate.
For your reference, the money supply figures for the year of 2007 are as follows (click here for the spreadsheet if the inline frame is not shown) :
As you can see, in 2007 we have been roaring along with an average M3 money supply growth of 20.6% year-on-year. It was only in the last 3 months (Oct-Dec 2007) that the money supply growth has slowed down considerably.
However, if anything else, this is even worse than the time where it was reported on this blog when M3 growth hit a high of 23.62% back in Jun 2007. At the time, GDP growth was reported to be a still-healthy 8.6% so the M3-to-GDP differential was 23.62% - 8.6% = 15.02% then.
Hence, for myself and for those of you readers who subscribe to the classic Austrian-school definition of monetary inflation as money supply growth relative to economic growth, the fight to maintain our purchasing power has just gotten a lot harder, and this stagflationary environment just makes things even worse.
See also :
1. Singapore 2007Q4 GDP contracted 4.8%, 2008 economic growth forecast lowered
2. Singapore economy shrinks first time since 2003
3. Singapore CPI inflation hits new 25-year high of 4.4% in December
4. Singapore : Inflation rate could push past 6% in Q1 2008
(2008-02-25 13:10:42 SGT) [Biz] Permalink Comments [1]
Rising inflation across Asia mauls Singapore Reits
Trusts may still get big lift from higher rents, higher hotel rates, say analystsSOARING inflation across Asia has sucked the life out of real estate investment trusts (Reits), whose high-yielding dividends have made them wildly popular among investors in recent years.
Investors had wrongly penalised Reits with concerns over acquisition growth and credit-tightening conditions. They have ignored the ‘organic’ boost Reits may get from higher rents and hotel rates. - MORGAN STANLEY, in a report recommending property trusts to its clients — ST FILE PHOTO
Reits, in general, have fallen about 32.5 per cent in value from their peaks last year, but those with assets in inflation-prone economies, such as China, have fared even worse, according to financial portal Shareinvestor.com.
CapitaRetail China Trust, for instance, has fallen 52 per cent in four months, as inflation in China galloped to 7.1 per cent - its highest level in over a decade.
Reits are financial instruments investing in real estate like shopping malls, office buildings and hotels.
Investors can buy units, which are much like shares, offering attractive dividend yields of 6 per cent to 8 per cent derived from rents.
This is far higher than the 1.5 per cent interest on one-year fixed deposits at a bank.
Historically, a low interest rate environment has been good for Reits - if accompanied by low inflation.
Take CapitaMall Trust, the first Reit listed in Singapore. Its assets include the Tampines Mall and Junction 8 shopping centres.
It received an overwhelming response from investors when it listed six years ago, rising from just 96 cents in July 2002 to a record high of $4.32 in July last year. Inflation played its part by staying at a benign 1 per cent.
As the consumer price index, however, surged from 1.3 per cent in June to 4.4 per cent in December, CapitaMall slid 20 per cent over the period.
The inflation pressure is unlikely to abate in the near future.
Last week, the Government revised its estimates upwards to between 4.5 per cent and 5.5 per cent for the year, from an earlier forecast of 3.5 per cent to 4.5 per cent.
So, while fears of a United States recession are causing much grief among investors as they watch the value of their growth stocks evaporate, inflation is becoming a big threat to those with high dividend-yield plays like Reits.
One trader explained: ‘A Reit may offer 6 per cent in dividend yield. But if inflation is running at 4.5 per cent, the actual yield an investor is getting is only 1.5 per cent.’
To compensate for the lower return, an investor will demand a lower price for the Reit, which escalates the pressure on its share price.
Still, analysts have not stopped promoting Reits, despite their lacklustre performance, to clients.
Morgan Stanley made a case last month with a report arguing that investors had wrongly penalised Reits with concerns over acquisition growth and credit-tightening conditions.
Investors have ignored the ‘organic’ boost Reits may get from higher rents as leases expire and hotel rates are jacked up during peak periods.
Citigroup noted on Tuesday that while there may not be a clear growth strategy for Reits this year, some are trading at hefty discounts to their net asset values, despite offering single-digit or even double-digit dividend yields.
‘This makes Reits potential takeover targets, if they have loose shareholding structures,’ it added.
Its top picks include Ascendas Reit, Suntec Reit and Parkway Life Reit.
Source : Straits Times - 23 Feb 2008
List of Falling Singapore Stocks:
lionnoisy,
I thought I already explained to you the asset and liabilities?
You have comprehension problems?
do all MODS on holiday?
Have any one seen Sg Ty and others posting so many unrelated
postings here to waste precious cyber space affecting and forumers
moods?
Remember,u are what u post!!
With strong exports and high commidity prices,why do the total
gavaman debts increase?
http://www.abs.gov.au/AUSSTATS/[email protected]/allprimarymainfeatures/63CF2134168DCE39CA2570DF001DCE9F?opendocument
2005---total gavaman debts 95 b
2008----increase to 100 billion,about 10% of GDP!!

australia private and gavaman credits is 340 % of GDP!!
http://www.abs.gov.au/AUSSTATS/[email protected]/Lookup/5232.0Main+Features1Jun%202008?OpenDocument
I am concerned about 40 b debts of state and local gavamans
and the ferderal 60 b debts !!
Singapore stagflation : May 2008 exports fell most in 17 months; inflation at 26-year highs
<!-- ADDTHIS BUTTON BEGIN --> <!-- ADDTHIS BUTTON END -->
This article belongs to the Singapore stagflation watch story arc.
Singapore's exports fell the most in 17 months in May [2008] as the island's manufacturers shipped fewer electronics and other goods to the US and Europe. Non-oil domestic exports dropped 10.5% from a year earlier, the trade promotion agency said today [17 Jun 2008]. Manufacturers across Asia face easing demand amid slowing growth in the US, the region's largest overseas market. Pharmaceutical shipments dropped 48.5% in May from a year earlier, while electronics shipments slipped 8.5%, the 16th consecutive drop. Semiconductor shipments dropped 12.6%. Sales to the European Union fell 28% in May and US shipments dropped 22.3%.
- The Singapore economy continues to be confronted by stagflation as economic weakness persists and shows signs of actually worsening, while inflation continues to run at 26-year highs. As I have commented earlier, this is as classic as it gets regarding the definition of stagflation : stagnant or slowing economic growth in a time of rising inflation.
Sure, biotech manufacturing is subject to some "lumpiness" as equipment needs to be cleaned and re-setup for the next batch of medicines, but a 48.5% drop year-on-year? This is as good as "falling off the cliff", a sinking sensation that many in the peakoiler community are very, very familiar with. And electronics? 16 consecutive drops in 16 months. They could be trying for some kind of record here, together with semiconductors. A very ugly picture, especially given that inflation is still ongoing, and crude oil continues to set new record highs regularly.
This is the kind of situation that can lead to restlessness amongst the population, and in extreme cases descend into disorder and chaos and in fact it already has in some countries. You can be very sure that the government has got to be very concerned about it. Meanwhile, as an individual, in order to hedge against slowing economic growth, you might want to look into getting a job in a traditionally defensive sector, such as government, military, education, healthcare, and such. And as an investor, in order to hedge against inflation, what you can do is to buy into commodities, hold on to them, and sit tight. Gold and oil and uranium and food and other resources are going higher. Much, much higher. We ain't seen nothing yet.
Singapore CPI inflation rate for May 2008 continues at 26-year high of 7.5%
Singapore's consumer prices rose at a slower-than-expected pace last month [May 2008], reducing the need for further currency gains to rein in inflation. The consumer price index [CPI] jumped 7.5% from a year earlier, matching April's 26-year high record, the Department of Statistics said [23 Jun 2008]. The Monetary Authority of Singapore [MAS] had forecast a 5-6% inflation rate for 2008. The central bank has allowed its currency to strengthen against the US dollar, saying the exchange rate remains its most effective tool to fight inflation.
- The Singapore inflation rate is reportedly stabilizing and analysts are already predicting that it will come down in the second half of 2008. Singapore M3 money supply figures also appear to be stabilizing around the 12-13% level in the past half year, down from a high of 23.62% in 2007. But the money supply growth rate is only half the story - the other half is its relationship to the growth of available goods and services in the economy. For the inflation rate to be stable, economic growth has to at least keep up with money supply growth. With a looming global economic slowdown and imminent worldwide recession, the economic growth factor is the big wildcard.
Gold and crude oil prices may have paused from breaking new all-time record highs for the time being, but the inflationary storm is far from over as yet. We may only be passing through the eye of the hurricane here - just when people start to get lulled into complacency, the winds of inflation could well pick up with renewed force - perhaps even stronger than ever. We need to remain vigilant against inflation. This is no time to let down your guard yet.
Singapore economy stuck in mud : inflation rising, M3 falling, GDP crashing - the stagflation formula
This article belongs to the Singapore stagflation watch story arc.
mas.gov.sg -> mas.gov.sg (pdf) :
The latest Singapore money supply figures are out. For the month of Dec 2007, the Singapore M3 money supply growth has continued to slow, and it now stands at 14.14% year-on-year. However, real inflation shows no signs of abating because we are at the point where economic growth is falling (crashing) faster than M3 money supply growth is slowing. The Singapore economy is thus stuck in mud, and the stagflation formula goes as follows :
14.14% M3 growth - (-4.8% economic growth) = 18.94% real inflation rate.
For your reference, the money supply figures for the year of 2007 are as follows (click here for the spreadsheet if the inline frame is not shown) :
As you can see, in 2007 we have been roaring along with an average M3 money supply growth of 20.6% year-on-year. It was only in the last 3 months (Oct-Dec 2007) that the money supply growth has slowed down considerably.
However, if anything else, this is even worse than the time where it was reported on this blog when M3 growth hit a high of 23.62% back in Jun 2007. At the time, GDP growth was reported to be a still-healthy 8.6% so the M3-to-GDP differential was 23.62% - 8.6% = 15.02% then.
Hence, for myself and for those of you readers who subscribe to the classic Austrian-school definition of monetary inflation as money supply growth relative to economic growth, the fight to maintain our purchasing power has just gotten a lot harder, and this stagflationary environment just makes things even worse.
See also :
1. Singapore 2007Q4 GDP contracted 4.8%, 2008 economic growth forecast lowered
2. Singapore economy shrinks first time since 2003
3. Singapore CPI inflation hits new 25-year high of 4.4% in December
4. Singapore : Inflation rate could push past 6% in Q1 2008
(2008-02-25 13:10:42 SGT) [Biz] Permalink Comments [1]
Rising inflation across Asia mauls Singapore Reits
Trusts may still get big lift from higher rents, higher hotel rates, say analystsSOARING inflation across Asia has sucked the life out of real estate investment trusts (Reits), whose high-yielding dividends have made them wildly popular among investors in recent years.
Investors had wrongly penalised Reits with concerns over acquisition growth and credit-tightening conditions. They have ignored the ‘organic’ boost Reits may get from higher rents and hotel rates. - MORGAN STANLEY, in a report recommending property trusts to its clients — ST FILE PHOTO
Reits, in general, have fallen about 32.5 per cent in value from their peaks last year, but those with assets in inflation-prone economies, such as China, have fared even worse, according to financial portal Shareinvestor.com.
CapitaRetail China Trust, for instance, has fallen 52 per cent in four months, as inflation in China galloped to 7.1 per cent - its highest level in over a decade.
Reits are financial instruments investing in real estate like shopping malls, office buildings and hotels.
Investors can buy units, which are much like shares, offering attractive dividend yields of 6 per cent to 8 per cent derived from rents.
This is far higher than the 1.5 per cent interest on one-year fixed deposits at a bank.
Historically, a low interest rate environment has been good for Reits - if accompanied by low inflation.
Take CapitaMall Trust, the first Reit listed in Singapore. Its assets include the Tampines Mall and Junction 8 shopping centres.
It received an overwhelming response from investors when it listed six years ago, rising from just 96 cents in July 2002 to a record high of $4.32 in July last year. Inflation played its part by staying at a benign 1 per cent.
As the consumer price index, however, surged from 1.3 per cent in June to 4.4 per cent in December, CapitaMall slid 20 per cent over the period.
The inflation pressure is unlikely to abate in the near future.
Last week, the Government revised its estimates upwards to between 4.5 per cent and 5.5 per cent for the year, from an earlier forecast of 3.5 per cent to 4.5 per cent.
So, while fears of a United States recession are causing much grief among investors as they watch the value of their growth stocks evaporate, inflation is becoming a big threat to those with high dividend-yield plays like Reits.
One trader explained: ‘A Reit may offer 6 per cent in dividend yield. But if inflation is running at 4.5 per cent, the actual yield an investor is getting is only 1.5 per cent.’
To compensate for the lower return, an investor will demand a lower price for the Reit, which escalates the pressure on its share price.
Still, analysts have not stopped promoting Reits, despite their lacklustre performance, to clients.
Morgan Stanley made a case last month with a report arguing that investors had wrongly penalised Reits with concerns over acquisition growth and credit-tightening conditions.
Investors have ignored the ‘organic’ boost Reits may get from higher rents as leases expire and hotel rates are jacked up during peak periods.
Citigroup noted on Tuesday that while there may not be a clear growth strategy for Reits this year, some are trading at hefty discounts to their net asset values, despite offering single-digit or even double-digit dividend yields.
‘This makes Reits potential takeover targets, if they have loose shareholding structures,’ it added.
Its top picks include Ascendas Reit, Suntec Reit and Parkway Life Reit.
Source : Straits Times - 23 Feb 2008
SINGAPORE, Oct 10 - Singapore has slipped into recession and the Government has revised its 2008 growth forecast to around 3 per cent from a previous estimate of 4 to 5 per cent.
The economy shrank at an annualised, seasonally adjusted rate of 6.3 per cent in the third quarter, according to third quarter advance estimates released by the Ministry of Trade and Industry on Friday morning, pushing the export-dependent economy into its first recession since 2002.
The government also revised down its 2008 growth forecast to around 3 per cent from a previous estimate of 4 to 5 per cent.
Economists had expected the Republic to narrowly escape a recession in the third quarter by growing 1.1 per cent, lifted by a slight improvement in electronics output.
A recession is often defined as two consecutive quarters of economic contractions.
The deepening financial crisis, which sparked banking crises in the United States, Iceland, Britain, Germany and Ireland, is threatening to drag the world economy into recession.
The advance estimate, based largely on July and August data, gives an early indication of the economy's performance during the July-September period.
MTI said the Singapore economy is estimated to contract by 0.5 per cent in the third quarter, than a year ago.
On a seasonally adjusted, annualised quarter-on-quarter basis, real GDP declined by 6.3 per cent, following a 5.7 per cent decline in the previous quarter.
On the outlook for the year, MTI said since the revised GDP forecast in August, "external economic conditions have deteriorated more than expected and some sectors of the economy have weakened significantly on account of industry-specific or domestic factors.
"The worsening of the financial crisis in the US in recent weeks has deepened the credit crunch, making it more difficult for businesses to sustain economic activities. With unemployment on the rise and house prices continuing to fall, US consumer sentiment has weakened further and will affect demand for exports from Asia and the rest of the world."
It added that Singapore's export-oriented sectors, such as manufacturing, will be affected, noting that Europe is also facing severe strains in the banking sector, tighter credit conditions, and adjustments in housing prices.
Growth in major economies such as Germany, France, Italy and the UK has dipped sharply in the second quarter.
Growth forecasts for several Asian economies, such as China, India and South Korea, have been revised downwards since the start of the year.
The estimates showed that Singapore's manufacturing sector continued to be weighed down by the negative growth in biomedical sciences, as pharmaceutical companies are still producing a mix of pharmaceutical ingredients with values lower than compared to a year ago.
The precision engineering and chemicals clusters have also slowed, because of weaker external demand.
The construction sector grew by 7.8 per cent in the third quarter, compared to the 18.3 per cent growth in the first half of 2008. Despite a strong pipeline of construction projects, a shortage of contractors, a tight labour market for engineers and project managers, and longer waiting times for equipment, have delayed the realisation of these projects.
MTI said the financial services sector is likely to see slower growth in the coming months as the ongoing global financial crisis has heightened uncertainties for sentiment-sensitive segments such as stocks trading and fund management activities.
"Taking into account the slowdown in the global economy and key domestic sectors, MTI has revised the 2008 GDP growth forecast to around 3 per cent. The inflation forecast of 6 - 7 per cent for 2008 remains unchanged," it said. - The Straits Times
Singapore First Asian Economy to fall into Recession
Singapore becomes the first Asian victim of recession
AFP, SINGAPORE
Saturday, Oct 11, 2008, Page 1
Singapore has become the first Asian economy to fall into recession, analysts said yesterday, after the government revised downward its full-year growth estimate and eased monetary policy for the first time in years.
The Ministry of Trade and Industry lowered the city-state’s full-year growth forecast to around 3 percent, citing a slowdown in the global economy and key domestic sectors.
The move came as the ministry released preliminary data showing that real GDP declined by 6.3 percent in the third quarter after contracting 5.7 percent in the previous quarter, the ministry said.
While it did not describe the economy as being in recession, a technical recession is generally defined as two consecutive quarters of contraction in economic output.
“Singapore will be the first Asia economy to fall into a technical recession,” DBS Group Research said in an assessment of the data.
In a move to confront the downturn, the Monetary Authority of Singapore (MAS) — its de facto central bank — said it was easing monetary policy for the first time in more than four years.
“The Singapore economy has weakened over the course of 2008, alongside an escalation in the turmoil in financial markets and a more severe deceleration in global economic activity,” MAS said.
These developments meant new uncertainties for the Singapore economy, while slower Asian growth would restrain activity in a range of service industries such as transportation and tourism, it said.
“The risks to external demand conditions continue to be on the downside and a more severe global downturn cannot be discounted,” the bank said.
Singapore is Southeast Asia’s wealthiest economy in terms of GDP per capita, but is heavily dependent on trade. This makes it sensitive to hiccups in developed economies, particularly key export markets the US and Europe.
Economists polled by Dow Jones Newswires had forecast a 0.3 percent quarter-on-quarter rise in GDP, the value of goods and services produced in the economy.
Compared with the third quarter of last year, the ministry said Singapore’s economy contracted by 0.5 percent in real terms, against the 0.8 percent expansion foreseen in the Dow Jones poll.
Singapore in recession
Written by Webmaster Friday, 10 October 2008
MTI has also revised its full-year growth forecast for the second time this year, lowering it to 'around 3 per cent' from 4 to 5 per cent previously. This would make it the weakest pace in seven years.
Recognising growth concerns, the Monetary Authority of Singapore also changed its policy stance to zero appreciation of the Singapore dollar, reversing the gradual appreciation policy it has adopted since 2003.
On a quarterly basis, third-quarter GDP contracted 6.3 per cent from the second quarter, on top of a 5.7 per cent decline in the previous three months. A technical recession is generally defined as two consecutive quarters of decline.
Manufacturing led the slowdown again this time around, weighed down by a poor performance in the biomedical sciences segment. It was also hit by weakened global demand for exports as the United States-triggered financial crisis spreads around the world.
The sector shrank by 11.5 per cent in the third quarter, after declining 4.9 per cent in the previous quarter.
Growth in construction and services also slowed. Construction, in particular, saw its pace of expansion halved to single-digit growth, as projects were delayed by the construction squeeze, said MTI.
Services, touted as a key driver of growth this year, is likely to take a hit as well as financial services falters in the wake of the global credit crunch.
Most economists expect the economy to grow even more slowly next year, with the chance of a technical recession turning into a 'real' one.
'With external conditions deteriorating and the lack of domestic demand support, we expect Singapore to register no growth next year... with a muted recovery, if at all, expected only in the second half of next year at the earliest,' said Morgan Stanley economists in a report.
Inflation peaks
Inflation, which reached a 26-year high earlier this year, has peaked, said MAS. Consumer prices will rise between 6 per cent and 7 per cent this year, and gains will ease to between 2.5 per cent and 3.5 per cent in 2009, it predicted.
'Against the backdrop of a weakening external economic environment and continuing stresses in global financial markets, the growth of the Singapore economy is expected to remain below potential in the period ahead,' said MAS.
'Inflation is expected to trend down in 2009 as the global and domestic economies slow.'(Straits Times Singapore)
Wednesday, 10 October, 2001, 04:56 GMT 05:56 UK
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<!-- /NOLImage -->The recession-hit economy of Singapore has shrunk by a record 5.6% during July to September.
The sharp contraction was expected by analysts, and the government is now forecasting that the economy will contract by 3% for the full year.
"In the light of the uncertainty in the global economy, Singapore has now revised its full year growth forecast to minus 3.0%," said Trade Minister George Yeo.
Previously the government had forecast 0.5-1.5% growth.
US ties
The country is suffering from its exposure to the US - its biggest trading partner - which is battling with its own economic problems.
Last month's terrorist attacks on the US have also exacerbated problems by denting consumer confidence.
"The appalling attacks on September 11 and the resulting train of events have probably tipped the global economy into a recession," said Mr Yeo.
Electronics downturn
The sharp contraction in the third quarter was blamed on the downturn in the electronics sector.
The goods producing sector in the trade-driven country fell by 15% while manufacturing output fell by 21% compared with a year ago.
This constitutes the sharpest fall since the 1985 recession.
"From the data so far, it certainly describes the economy is in a far worse shape than it has ever been," said Song Seng Wun, a regional economist at GK Goh brokerage.
However, Aberdeen Asset Management's Hugh Young told the BBC's World Business Report:"The feeling on the streets is not nearly as bad or as gloomy as it was when the Asian crisis hit. Certainly there is a lot of fear over job security right through Singapore at the moment."
By Jamie Dunkley
Last Updated: 11:13AM BST 10 Oct 2008
The Ministry of Trade and Industry also revised downwards full-year growth forecast to around 3pc, citing a slowdown in the global economy and key domestic sectors.
Southeast Asia's wealthiest economy saw gross domestic product fall by 6.3pc during the third quarter having previously contracted by 5.7pc.
While the ministry did not describe the economy as being in recession, a technical recession is generally defined as two consecutive quarters of contraction in economic output.
In a move to confront the downturn, the Monetary Authority of Singapore - its de facto central bank - said it was also easing monetary policy for the first time in more than four years.
Singapore's economy expanded by 7.7pc last year but have been signs of a slowdown following contractions in Singapore's key manufacturing sector, which includes the country's electronic and pharmaceutical industries.
Construction growth slowed to 7.8pc from 19.8pc, during the quarter, although service industries grew by 6.1pc, marginally down from 7pc in the second quarter.
Singapore's last technical recession was recorded in 2002, when the economy contracted by 2.4pc during the year. The country is seen as an important indicator of economic trends in the rest of Asia due to its export-dependent economy.
Singapore Prime Minister Lee Hsien Loong said Asian economies face a "rough ride" for at least the next year as weakening consumer demand from developed countries hurt the region's exports.
TODAYonline, Weekend, October 11, 2008
................The Singapore dollar, already battered in recent weeks, is expected to weaken further against its United States counterpart. Goldman Sachs predicts the Singapore dollar would weaken to $1.54 to the greenback in the next six months, while UBS expects it to reach $1.50 by the end of the year, according to Bloomberg. The Singapore dollar was trading at around $1.48 yesterday evening, almost 10 per cent off its recent high of $1.35 on July 16. .............
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SINGAPORE manufacturers are cautious about the business prospects in the next six months, a Government survey released on Thursday showed, reflecting concerns over a slowing global economy.
In the latest quarterly survey conducted by the Economic Development Board (EDB) among manufacturers, 87 per cent said the outlook for the next six months will not improve from the previous quarter when manufacturing output contracted 5.6 per cent.
A separate survey by the Department of Statistics showed companies in the services sector sharing the same cautious sentiment over the six-month period.
According to the survey, 24 per cent of the services firms polled expected business conditions to improve, while 22 per cent were less optimistic.
The responses are weighted by operating receipts and value added.
<!-- show media links starting at 7th para -->Chemical makers had the gloomiest outlook, with a net weighted 23 per cent of firms expecting business conditions to worsen on the back of high material costs.
Producers in the general manufacturing industries, which include the food, tobacco and printing sectors, were the most optimistic, with a net weighted 11 per cent expecting business to improve.
Singapore's economy shrank 6.6 per cent in the second quarter after seasonal adjustments, its biggest contraction in five years amid a slowdown in key export markets the United States and the European Union.
The less positive business outlook comes against a backdrop of rising unemployment in Singapore.
The jobless rate in the second quarter went up to 2.3 per cent after seasonal adjustments, compared to the previous quarter's 2 per cent, according to latest estimates released by the Ministry of Manpower on Thursday morning.
The data showed that employment grew by 70,600 in the second quarter this year, which is slightly lower than the increase of 73,200 in the previous quarter.
In his National Day message for Singaporean workers, NTUC chief Lim Swee Say on Thursday urged workers to moderate their wage expecations for this year, warning that pushing wages up to fully offset inflation is a risky move, as they will end up paying ever higher prices.
'Instead of pushing wages up to fully offset inflation, we must continue to link built-in wage increase to productivity gain and help our people through various non-wage measures', he said.
This will prevent a 'price-wage spiral', he said.
Singapore still faces woes despite millions spent to boost visitor numbers
With 100,000 set to flock at F1, Singapore tourism is still slowing down
Tourism makes up nearly to 10 per cent of Singapore total GDP and the local tourism industry will take a ‘battering’ as analyst predicts Singapore tourism to slow despite our upcoming inaugural F1 first ever night race
The global credit crisis and slowing economy also didn’t help in the slowdown in Singapore tourism. Some 100,000 visitors are expected for the F1 weekend and some 40,000 of those are from overseas
F1 Singapore Grand Prix is part of our nation plan to make it a more global and a unique place. Not only we’re attracting international act of F1 which will earn around S$100 million ($70 million) a year in tourism revenue, there’s also our integrated casino which will open end of next year
The Exorcist: The Beginning
Nazi Sergeant Major: Mod is not here today, n00b!!!
Originally posted by maurizio13:
A simple reason why Singapore does not have much foreign debt.
Singapore exploits it's citizens under the CPF, where it uses funds at extremely low interest rates of 2.5% (while inflation hovers around 6% - 8%). If there is such cheap funds available, wherefore there be need to raise funds through the foreign or domestic market at prevailing inflation rates (afterall which fool would loan you at 1% if inflation is at 6%?). We do not have foreign debt, but our domestic debt owed to CPF members is valued at SGD 136 billon. If the government issues domestic debt, it is unlikely to suffer from payments issues, afterall all it has to do is print more currency (fiat currency).
Then they charge you excessively for HDB and Medical services, making it hard for average folks to plan for retirement. Should any major illness befall you, then as an average Singaporean, you can kiss half your retirement savings adios.
You forgot to mention how CPF conveniently addresses the liquidity issue as well - how Temasek and GIC must be blessed to be in a position to sucker a substantial equivalent of a "deposit base" rendering the impact of the credit crisis on them effectively irrelevant... ![]()
John Mack would probably have slept better had he too been in a position to enact legislation to seize/nationalize/coerce others to provide Morgan Stanley with the much-needed liquidity a couple of weeks back.