Singapore’s exports have been reduced to a six-year low. The goods that pass through the city are usually bound for other countries and is an indicator of demand thus leading to the conclusion that demand in China is likely slowing. In fact, China reported its slowest quarterly economic growth on record.
Total non-oil exports for Singapore fell by 17.3% in June. Imports fell by 4.8% while compete trade fell by 7.2%. According to the world bank, Singapore is more dependent on trade than any other nation, excluding Luxembourg. Due to this dependence the economic repercussions of these decreases with heavily affect Singapore.
Adding to this the GDP for the first quarter of 2019 saw a 3.4% decrease. The issues facing Singapore are likely the effect of the first year of the US-China trade war. The economies that have been hit the hardest due to the trade war are Singapore, South Korea, and Taiwan, who are all heavily reliant on international trade. Analyst predicts that no improvements are to be expected soon.
Gareth Leather, senior Asia economist at Capita Economics commented:
Early indicators suggest that GDP growth slowed sharply across emerging Asia in the second quarter. Although most countries should stage a gradual recovery over the coming year, growth is likely to remain much weaker than the consensus and the International Monetary Fund expect.
The region is now expanding at its weakest pace since the global financial crisis,
Singapore and Taiwan appear to have barely grown at all in the second quarter of the year.
An independent analysis released by Japnese bank Nomura did not hold much hope for the future. The analysis uses indicators to calculate future regional growth. Indicators such as surveys of manufacturers from emerging markets, imports, and global semiconductor sales are used to provide an indicator of what is to come.
The bank’s analyst stated,
Our leading index had rebounded from a very weak level in May, hinting that the worst may be over, but this proved to be a false dawn, as this update signals a renewed downturn in the leading index in August and indicates Asian exports should remain in the doldrums in coming months.
Also adding that,
The export picture should remain bleak in coming months, in line with a lack of progress in US-China trade negotiations, heightened global economic uncertainty weighing on global [capital expenditure which is the buying of fixed assets like property and vehicles], and signs that using trade protectionism as a weapon of foreign policy is spreading.
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