Recession looms for Singapore : economists

last SG · 2008-10-09T15:22:44+00:00

the ministers should lead by example..pay cut for ministers...and possibly retrenchment..

lionnoisy SG

We are one of the first in recession becos SG grew in third world speed.

SG just grew at estimated 3 % for 2008 iso 7 % as previouly estimated.

Few % growth rate is a norm in 1 st world country.

If u dunt like the term First World,may i change to

country with GDP per capita at US$35,000 and above.

The facts is NZ alreday in technical recession at end of

2Q,while SG in recession at end of 3Q!!

NZ recession is earlier than SG!!

http://app.mti.gov.sg/default.asp?id=148&articleID=15561

http://www.rbnz.govt.nz/statistics/econind/a5/data.html

Quarter....NZ....SG

4Q 07....8.0...5.4

1Q 08....6.6...7.0

2Q 08...3.3..2.3

3Q 08....NA....-0.5 advance estimates only

New Zealand was declared in technical

Compare with other 1st world

http://www.pm.gov.au/media/Release/2008/media_release_0543.cfm

World--below

Advanced economies--below

United States---below

Japan---below

Euro area---below

Major advanced economies (G7)---below

Australia---below

lll

SingaporeTyrannosaur SG

Singapore still first in asia to be in recession

Why?

Growing fast is no excuse, bad planning

Is this acceptable?

SingaporeTyrannosaur SG

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.

SingaporeTyrannosaur SG

How lionnoisy?

the media says that we are the first in asia to be recession leh, the articles out there go read

dun say we anyhow anti sg

SingaporeTyrannosaur SG

even forbes agrees,

Sg FIRST to be in recession!

Singapore in recession
Friday, 10 October 2008
Koh Gui Qing, Reuters

Singapore eased monetary policy on Friday for the first time since 2003 after the Southeast Asian economy sunk into its first recession in six years and as the meltdown in financial markets threatened to further hit growth.

Singapore's export-dependent economy shrank an annualised and seasonally adjusted 6.3 percent in the July-September quarter, advance government estimates showed, compared to the 1.1 percent growth forecast by economists in a Reuters poll.

Singapore last slid into a recession -- usually defined as two consecutive quarters of economic contractions -- in 2002.

The government also revised down its 2008 growth forecast to around 3 percent on Friday from an earlier estimate of 4 to 5 percent.

Economists said the looser monetary policy will cushion the headwinds Singapore's economy faces from the worsening crisis, but the economy could be stuck in recession in the fourth quarter, and in the first half of next year.

"Looking at how fast construction is slowing, given services is slowing, and the fact that the global economy is going in a downwards spiral, it is quite likely Q4 will remain in negative territory," said Selena Ling, head of treasury research at OCBC. "Quite possibly, first half of next year will remain in recession," she said.

Singapore's central bank sets policy by managing the Singapore dollar in a secret trade-weighted band against a basket of currencies, instead of setting interest rates.

A looser policy will allow the currency to rise at a slower pace, and the currency should trade at the lower-end of the band as growth slackens, analysts said.

"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," the central bank said on Friday.

"MAS is therefore shifting its policy stance to a zero percent appreciation of the S$NEER policy band," it said in its twice-yearly policy review statement.

The Singapore dollar rose to 1.4724 per U.S. dollar after the central bank's announcement compared to 1.4780 before as traders adjusted positions after the widely anticipated policy easing. It soon pared gains.

Singapore is the first Asian country to fall into a recession since the crisis started. Japan is teetering on one, and New Zealand slid into a recession in the second quarter for the first time in more than a decade.

The unfolding global financial crisis, the worst since the 1930s, has prompted central banks across the world from the United States to China to loosen policy to avoid a global recession.

Singapore is the first country in Asia to report quarterly gross domestic output data for the third quarter, and its heavy dependence on trade makes the $165-billion economy a good gauge of the impact of the crisis on the rest of Asia. Singapore, like most other Asian countries, depends on the world -- especially the United States and Europe -- to buy its exports and keep its economy growing.

But the worsening crisis has dented global demand for Asian exports. Singapore's non-oil domestic exports, worth about 70 percent of the economy last year, fell on an annual basis in June, July and August.

lionnoisy SG

Real Economic Growth

http://www.singstat.gov.sg/stats/charts/econ.html

http://www.singstat.gov.sg/stats/themes/economy/ess/essa11.pdf

http://www.pm.gov.au/media/Release/2008/media_release_0543.cfm

GDP growth rate

year----SG...Major advanced .......G7.....Euro area

.....................economics

2004---13.7

2005---8.1

2006---8.8..............3.0...........2.7.........2.8

2007--12.1.............2.6..........2.2........2.6

2008---est 3

@@@@@@@

so ,u can see SG grew at a crazy rate in 1 st world standard.

Now slowed down to few % is normal for 1 st world country!!

i am not interested for forecast.

mmm

lionnoisy SG

Ok ok.Even we are 1 st in Asia in recession.So what?

ask the medias which country with GDP US$49,900 in 2007

(see cia.gov)

per capita and government with NET DEBT FREE

could achieve this growth rate?

Dunt tell me US and UK so and so.

just US carry national debt 10 trillion or 74% of GDP.

Australia-----no eye see lah.....

Repulic of Singapore GDP growth rate

2004---13.7

2005---8.1

2006---8.8..

2007--12.1..

2008---est 3

reyes SG

so ,u can see SG grew at a crazy rate in 1 st world standard.

Now slowed down to few % is normal for 1 st world country!!

i am not interested for forecast.

mmm

your optimism was definitely not share by many economist and your much admire LKY, LHS and tharma.

recession is already start to bite into high tier and middle high tier property prices.reduction in spending in adverisement as shown by SPH. this show all business are basically pessimistic about the general economy.

SWAT_SG SG

i dun see why singapore will not be badly hit by this global credit crisis.. singapore is an export economy mainly to US, UK, Japan as well as China. If you look deeper into the export figures, US and UK take up easily 40% of the goods exported from sg.

Now these countries not longer demand so many imports and protectism will set in to protect their own local industries and employment.. sg will definitely be hit hard... Majority of the workforce in the manufacturing sectors will be lay-off as orders falls and coys have to reduce operating cost..

ppl in the financial industry will also experience lay-off as foreign banks r trimming off excess fat to cut cost or outsource to cheaper countries like india etc...

with more citizens being laid off or fearing of being laid off.. consumer spending falls.. hence hurt the retail sectors... and the spiralling effect goes on... affecting housing, etc...

having annual gdp growth of 3% is a v optimistic estimate.. if this credit crunch continues.. 4Q08 export and gdp data will be extremely ugly and its not surprise if we see a flat or -ve gdp for 2008..

brace yourself to survive thru this recession.. if things get worsen.. i foresee a more gloomy pic ahead... drawing reference to the 1897 and 1930 great depression.. we are having the same problem brewing... and this time round more lethal as everything is leveraged.. the danger of leveraging is that once the deleveraging process kick in.. its going to be rapid and destructive cos' everything is magnified and noone can control the magnitude of such unwinding...

charlize SG

I just find it amazing that despite all the briliant planning and policies of the people at the top, Singapore is the first Asian country to fall into a technical recession.

I'm like, we pay them so much and we are first to drop?

What happened to all the trumpet blowing about our economy will be okay, things will be hard but not that bad, we will weather the storm etc?

At the rate things are going, I am just hoping that this won't turn into a full blown bloodbath in the economy.

maurizio13 SG

Actually the growth rate posted by lionnoisy, a large portion of it is inflationary growth, shifts in the LM curve of the IS-LM to the left.

The GDP growth posted by Singstat is not GDP per capita growth.

i.e. If initially you had 100 workers, you produced $100,000 GDP, therefore GDP per capita of $1,000. Then you import 200 workers, you produced $180,000 GDP, therefore a GDP per capita of $900. The GDP per Capita decrease while the GDP increased. In part some of the growth is due to shifts in the LM curve to the left, because an increased in foreigner population competing for resources like housing, this short term increase in demand caused a steep increase in the cost of housing and concomitantly other resources.

There is a difference between GDP and GDP per Capita, but of course our blind P4P follower lionnoisy knows not the difference or tries to hoodwink anybody stupid enough.

likedatosocan SG

Singapore may not totally collapse.

Rationale / suggestions:

1. If labor cost needs to trim, easy - import the replacers.

2. If need more money - hike. there are numerous items , services and goods that can still be price hiked by substantial amounts based on the observation that even a 22% electricity hike the people are so ok with it they don't even will protest (this is good). Hikes have 100% success rate guaranteed based on historical evidence.

3. If too many cars - ERP hike until the poorer cannot afford to use their cars leaving the roads to be used by the real rich.

4. People not investing in shares? Sell them the idea that there are some shares that can still be bought at a bargain. Use the public mass media.

5. Get more talents to serve the country - hike their salaries in December and jack up their bonus. Money talks.

So, what is the problem?

maurizio13 SG

Whether a country goes into recession earlier or later has no economic consequence, it's the duration of the recession that is of prime importance.

Singapore can be the last in going into a recession but if the recession last 10 years like Japan, whereas other economies lasted only 2 years, then there is significant difference.

Going to recession is not like a game of tightrope walking, where the first to fall is the loser. But of course lionnoisy an illiterate will not be able to distinguish the difference.

charlize SG

Singapore may not totally collapse.

Rationale / suggestions:

1. If labor cost needs to trim, easy - import the replacers.

3. If too many cars - ERP hike until the poorer cannot afford to use their cars leaving the roads to be used by the real rich.

4. People not investing in shares? Sell them the idea that there are some shares that can still be bought at a bargain. Use the public mass media.

5. Get more talents to serve the country - hike their salaries in December and jack up their bonus. Money talks.

So, what is the problem?

After reading that Singapore was the first to fall into a technical recession, do you still believe what the people at the top are telling the ordinary citizens?

Those living in the ivory towers have no clue as to the hardships borne by the common folk during the so called "boom" in the economy, let alone during a recession where things will be much much worse.

I really dread to see how the economy will hold up against the backdrop of a global slowdown.

IRs will cushion the impact of the recession?

I can almost hardly believe it now.

xtreyier SG

The only thing to fear is fear itself - so said a depression era US president.

We are only in a tech recession, as our fundementals are still solid. Our dollars are adjustable to help both export and imports and weighted in time to bring max benefits to our state.
Yes, we will be hurt by exports, more so our fellow neighbours who will bear the brunt of lower exports being purchased by us for exports to the western world. They will have a stockpile, which means either they drop their prices or they fold up.

We being only middlemen, need to get our cash together with loans and seek out the best lowest denominator in costs to ship to the western world which will still need critical household stuff such as medicines, food and daily commodities.
It isnt the end of the world.
But it will be if we ourselves stop spending and stop investing or hoarding money in biscuit tins at home. Real jobs will then be lost and savings wiped within months.

The choice to fail and end this world, or at least spell the end of Singapore, is within our collective hands.

angel7030 SG

The only thing to fear is fear itself - so said a depression era US president.

The choice to fail and end this world, or at least spell the end of Singapore, is within our collective hands.

It ok to re engineer singapore, i dun mind it total wipe out, remove the foreigners, readjust our position, change the govt, nurture the young ones and start all over again, it could be painful and long term adjustment, but then, nothing last forever. If Singapore is not wipe out now, sooner or later it will.

reyes SG

But it will be if we ourselves stop spending and stop investing or hoarding money in biscuit tins at home. Real jobs will then be lost and savings wiped within months.

who wouldnt stop and reduce spending in poor times?

saving the economy greatly depends on fiscal policy of govt not on individual singaporeans.

unless u wana invest in my hitler investment funds.

angel7030 SG

who wouldnt stop and reduce spending in poor times?

saving the economy greatly depends on fiscal policy of govt not on individual singaporeans.

unless u wana invest in my hitler investment funds.

Ya, our Nazi funds and bonds promises good returns. My fuhrer is right, spending very much depend on the fiscal policy, eg, the current increase in electricity will force people to spend even if they want to keep. So are other progressive increment coming soon.

So, invest with us, visit us at our office at the Bunker. Bomb prove.

xtreyier SG

I do not suscribe to the belief that we must burn everything so that from the ashes will only the phoenix arise to lead us to Nirvana.

Many thousands and even millions of precious lives will be lost.

We can ride out this recession better than our forefathers who were largely uneducated. It is time for us all to put what had been taught and experienced in life to the test of survival of our times. If we fail, we will only dishonour the sacrifice of our forefathers.

Now is the time to decide what are liabilities and and what are assets and do what we have to do. Not to skimp on spending but to spend more on our assests to grow it further.

Thousands of technological innovation that can improve our way of live and mankind are being research and developed right now, such as environmentally friendly products, hitech gadgets, energy saving or alternatives as well as medical genetic improvements products.
To keep our money in biscuit tins would be to deny them such funds for developement and stagnant our developement as a race. Such improvements are necessary and will be the engine of growth for economies once they are mass marketed.

charlize SG

Whether a country goes into recession earlier or later has no economic consequence, it's the duration of the recession that is of prime importance.

Singapore can be the last in going into a recession but if the recession last 10 years like Japan, whereas other economies lasted only 2 years, then there is significant difference.

Going to recession is not like a game of tightrope walking, where the first to fall is the loser. But of course lionnoisy an illiterate will not be able to distinguish the difference.

Only time will tell how Singapore will weather this storm.

Like I mention before, if during boom times, there is hardship among the common folk, the problems will be worse during a slowdown.

Let's keep our fingers crossed that there won't be a prolonged recession that could affect Singapore not just economically but socially.

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