Singapore avoids recession

AFP, SINGAPORE: Trade-dependent Singapore narrowly avoided a technical recession in the third quarter, official estimates showed yesterday, but analysts said the city-state’s growth outlook remains subdued because of China’s slowdown.
In a move to bolster growth, the Monetary Authority of Singapore (MAS) eased policy for a second time this year, slightly reducing the local dollar’s rate of appreciation to make exports more competitive after other Asian countries weakened their own currencies.
The central bank uses currency policy rather than interest rates as a tool to tweak the island’s open economy. It manages the Singapore dollar against an undisclosed basket of currencies of its major trading partners and competitors.
“The global disinflationary trend and depreciating currencies of our trading partners and competitors had somewhat eroded Singapore’s export competitiveness,” United Overseas Bank said in a market commentary.
“Going ahead, the ‘milder’ appreciation of our currency against the basket of currencies could help to support our export growth.”
The Singapore dollar rose following the central bank move as traders focused on news that the economy averted a recession, but analysts expect it to ease in the coming months.
Advance estimates from the trade ministry showed GDP grew 0.1 per cent in the July-September quarter, defying expectations of a second consecutive quarterly contraction, which would have pushed the economy into a technical recession.
An economic slump in China—the world’s second biggest economy—is hurting demand for exports from Singapore and other Asian countries.
“Despite the close shave, the storyline hasn’t changed,” leading bank DBS said, adding that the “growth outlook remains dicey”.
The MAS noted that “China’s growth momentum is easing on a sharp deceleration in investment
growth” which it said was among the factors weighing on trade-dependent economies.

Singapore avoids recession

AFP, SINGAPORE: Trade-dependent Singapore narrowly avoided a technical recession in the third quarter, official estimates showed yesterday, but analysts said the city-states growth outlook remains subdued because of Chinas slowdown. In a move to bolster growth, the Monetary Authority of Singapore (MAS) eased policy for a second time this year, slightly reducing the local dollars rate of appreciation to make exports more competitive after other Asian countries weakened their own currencies. The central bank uses currency policy rather than interest rates as a tool to tweak the islands open economy. It manages the Singapore dollar against an undisclosed basket of currencies of its major trading partners and competitors. The global disinflationary trend and depreciating currencies of our trading partners and competitors had somewhat eroded Singapores export competitiveness, United Overseas Bank said in a market commentary. Going ahead, the milder appreciation of our currency against the basket of currencies could help to support our export growth. The Singapore dollar rose following the central bank move as traders focused on news that the economy averted a recession, but analysts expect it to ease in the coming months. Advance estimates from the trade ministry showed GDP grew 0.1 per cent in the July-September quarter, defying expectations of a second consecutive quarterly contraction, which would have pushed the economy into a technical recession. An economic slump in Chinathe worlds second biggest economyis hurting demand for exports from Singapore and other Asian countries. Despite the close shave, the storyline hasnt changed, leading bank DBS said, adding that the growth outlook remains dicey. The MAS noted that Chinas growth momentum is easing on a sharp deceleration in investment growth which it said was among the factors weighing on trade-dependent economies.