Singapore in a bind – no growth


Singapore – the number 2 financial centre of Asia – my thoughts anyway – after Hong Kong – has a problem.

Economic weakness was revealed when the services industry contracted an annualized 3.8 percent in the first quarter from the previous three months – when it grew 7.7 percent.

Manufacturing and construction rebounded strongly in the quarter, expanding 18.2 percent and 10.2 percent respectively.

“The key factors we see here are an absence of a significant pickup in the external front,” Weiwen Ng, an economist with Australia & New Zealand Banking Group Ltd., said by phone from Singapore before the data was released. “The rest of the year will be a function of how the global outlook evolves.”

Singapore basically has confirmed what the IMF warned about this week – namely that in a time of a saturated global debt – growth is absent and the only way to lend it – is to join the global currency devaluation war.


Chart courtesy of Bloomberg.

This is more a consequence of Adam Smith’s invisible hand at work – through this low interest rate regime – if one looks at all major global banks the profits are drying up.

Expecting the US major banks to be posting huge losses Q1 – as did European Banks Q4 2015.

What is more relevant for Singapore though is the increase in company closures – these are exceeding new companies for the first time since 2009.

Recession on the cards.


Chart courtesy of Bloomberg.

So now Singapore has entered the currency wars with monetary easing – then who is next?

Everyone is catching the Japanese Disease.






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