ASEAN KEY DESTINATIONS
Singapore economy "may contract in third quarter"
SINGAPORE: From January to August, Singapore's non-oil domestic exports (NODX) fell 7.7 per cent on-year, and some economists say it could miss its official forecast of a 0 to 1 per cent growth this year.
Singapore's economy may even see a contraction in the third quarter, following a strong 15.5 per cent quarter-on-quarter growth in the second quarter.
DBS Bank senior economist, Irvin Seah, said: "If we do get a contraction in August industrial production number, I think it is almost a given that we will get a contraction in GDP growth for the third quarter.
"Over the last one month or so, we have seen problems emerging in two of our key neighbouring trading partners, essentially Malaysia and Indonesia.
"These two countries account for quite a big chunk of our exports. With the problems in these two countries, the depreciation of their currencies, it will certainly affect our non-oil domestic exports performance and indirectly our GDP growth."
Some economists said that the poor trade performance in August suggests that global growth outlook may not be as rosy as expected, and perhaps market expectation has gone ahead of fundamentals.
Apart from uncertainties in the emerging markets, some economists say growth in the US and Europe is also far from being firm, with unemployment still high in the developed economies.
The government expects the Singapore economy to grow by between 2.5 and 3.5 per cent this year.
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