No respite for ail­ing Sin­ga­pore econ­omy

The Myanmar Times - - International Business -

SIN­GA­PORE’S ex­port driven econ­omy shrank the most in four years in the third quar­ter as man­u­fac­tur­ing sharply con­tracted on weaker global de­mand.

The city-state, which is a bell­wether for Asia’s other trade-re­liant economies, has been hit hard by the slump in crude prices and slug­gish world growth, which have hurt its key oil and gas ser­vices sec­tor.

Its cen­tral bank, which uses the ex­change rate rather than in­ter­est rates to keep prices sta­ble, main­tained its mon­e­tary pol­icy of zero per­cent ap­pre­ci­a­tion in the ex­change rate for the lo­cal cur­rency.

The econ­omy con­tracted 4.1pc in the Septem­ber quar­ter from the pre­vi­ous three months, ac­cord­ing to pre­lim­i­nary data re­leased by the trade min­istry.

That com­pares to an­a­lyst ex­pec­ta­tions for flat growth and comes after a 0.2pc in­crease in the pre­vi­ous three months.

On an an­nual ba­sis, growth came in at an anaemic 0.6pc, the slow­est pace since 2009.

An­a­lysts pointed to a 17.4pc quar­ter-on-quar­ter slump in man­u­fac­tur­ing, which makes up about one fifth of the econ­omy, for the dis­ap­point­ing data.

De­mand for Sin­ga­pore’s ex­ports, which in­clude oil drilling rigs, phar­ma­ceu­ti­cals and semi­con­duc­tors, has been weak­en­ing as the global out­look de­te­ri­o­rates.

“The marine and off­shore en­gi­neer­ing sec­tor is the weak­est clus­ter of Sin­ga­pore’s man­u­fac­tur­ing sec­tor,” Ra­jiv Biswas, chief Asia Pa­cific econ­o­mist at IHS Global In­sight, told AFP.

“Oil and gas com­pa­nies have sharply re­duced ex­pen­di­ture on oil rigs and off­shore sup­port ves­sels.”

This month debt-laden Swiber Hold­ings, a Sin­ga­pore-listed com­pany that pro­vides con­struc­tion ser­vices for in­ter­na­tional oil and gas projects, was placed un­der ju­di­cial man­age­ment as it im­ple­ments a res­cue plan.

Sin­ga­pore ac­counts for 70pc of the global mar­ket for jack-up rigs and is a ma­jor player in off­shore sup­port ves­sels for the oil and gas in­dus­try.

The re­cent up­swing in crude prices to around US$50 a bar­rel – after strug­gling with 13-year lows be­low $30 in Fe­bru­ary – is not enough to “to trig­ger any sig­nif­i­cant up­turn in ex­plo­ration and devel­op­ment ex­pen­di­ture by the up­stream oil and gas in­dus­try”, Mr Biswas said.

Sin­ga­pore’s ser­vices in­dus­try con­tracted 0.1pc year-on-year and was down 1.9pc from the pre­vi­ous quar­ter.

Con­struc­tion re­mained a bright spot in the econ­omy, grow­ing 2.5pc year-on-year and 0.5pc from the pre­vi­ous quar­ter as the gov­ern­ment ramped up spend­ing.

Sin­ga­pore in Au­gust nar­rowed its full-year eco­nomic growth fore­cast to 1-2pc from 1-3pc as pro­jected pre­vi­ously.

It grew 2pc in 2015. –

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