Singapore Business Forecast Report Q4 2008 : Market Research Report

Singapore Business Forecast Report Q4 2008

Published by: Business Monitor International

Published: Jul. 28, 2008 - 57 Pages

Executive Summary: Second Half of 2008 Threatens To Disappoint
Chapter 1: Political Outlook: SWOT Analysis; BMI political risk ratings; Domestic politics; stability Versus Democracy; The difference between Singapore’s short- and long-term political risk ratings reflect the diverging strengths and; weaknesses of the territory’s political system, with the stability resulting from the dominance of the ruling People’s; Action Party (PAP), combined with the maturity of the city state’s society and economy, contrasting with the lack; of democracy.
TABLE: singapore poliTiCal oVerVieW
Chapter 2: economic outlook: SWOT Analysis; BMI Economic Risk Ratings; Economic Activity; Downside Risks Prevail; The authorities’ downward revision to Q108 growth figures, together with expectations of a poor result for Q208,; have led us to revise down our forecasts for real GDP growth in Singapore, to 3.9% in 2008 (from 5.9% previously) and 4.5% in 2009 (from 5.2% previously).
TABLE: ECONOMIC ACTIVITY: Monetary Policy; Inflation Risk Rising; The Monetary Authority of Singapore (MAS) faces a difficult balancing act due to the conflicting concerns of record high inflation and slowing growth. The MAS uses the exchange rate, rather than interest rates, to control inflation; in the domestic economy
TABLE: MONETARY POLICY: Demographic Analysis; Rapidly Ageing Population A Key Challenge; While Singapore’s population is projected to continue expanding until at least the mid-2030s, thus sustaining economic growth, its rapidly ageing population will create problems for both the economy and society going forward.
Chapter 3: Special Report: Mega-Urban Regions
TABLE: THE WORLD’S 30 LARGEST URBAN AGGLOMERATIONS
TABLE: THE WORLD’S RICHEST CITIES IN 2020 BY GDP
TABLE: THE WORLD’S FASTEST GROWING URBAN AREAS BY POPULATION
Chapter 4: Business Environment: SWOT Analysis; BMI Business Environment Risk Ratings; Business Environment Outlook
TABLE: BMI BUSINESS AND OPERATIONAL RISK RATINGS: Institutions
TABLE: BMI LEGAL FRAMEWORK RATINGS: Infrastructure
TABLE: LABOUR FORCE QUALITY: Market Orientation
TABLE: ASIA, FDI INFLOWS
TABLE: BMI TRADE RATINGS
TABLE: TOP EXPORT DESTINATIONS: Operational Risk
Chapter 5: Key Sectors: Freight Transport; Executive Summary; While Singapore in 2007 held on to its newly won position as the world’s busiest seaport, a strong competitive challenge from Chinese ports such as Shanghai and Shenzhen is shaping up.
TABLE: SINAGPORE FREIGHT CARRIED, DOMESTIC AND INTERNATIONAL: Tourism; Executive Summary; Given the continued strong performance of Singapore’s tourism sector, we are happy to maintain our tourist arrivals forecasts at present. By the end of our forecast period, in 2012, we predict that annual visitor arrivals will be running at 13.9mn.
TABLE: TRAVEL HISTORICAL DATA AND FORECASTS
TABLE: SINGAPORE TOURISM DATA - HISTORICAL DATA AND FORECASTS

Abstract

Second Half of 2008 Threatens To Disappoint

A downward revision to Q108 growth figures together with expectations of a poor result for Q208have led us to revise down our forecasts for real GDP growth in Singapore, to 3.9% in 2008 (from5.9% previously) and 4.5% in 2009 (from 5.2% previously). Advance Q208 GDP estimates revealedthat the economy likely expanded by just 1.9% y-o-y, with weaker manufacturing output leadingthe slowdown and a moderation in service sector and construction activity - traditional pillars ofgrowth - also playing a prominent part. With these trends set to remain in place, Singapore’seconomy now appears to be heading into a disappointing H208, and we caution that even afterour GDP revisions, risks to growth remain skewed to the downside.

The difference between Singapore’s short- and long-term political risk ratings reflect the divergingstrengths and weaknesses of the territory’s political system. An overall short-term political riskrating of 94.2 gives the city-state the top ranking in Asia, reflecting the absence of barriers to thegovernment’s ability to enforce its chosen agenda as a result of the ruling People’s Action Party’sdominance. However while Singapore’s long-term political risk rating of 75.5 is still relatively highon a comparative basis (it ranks Singapore fourth in emerging Asia), it underscores the city state’spolitical weaknesses with the country scoring just 59.2/100 in the characteristics of policy subcomponentof the ratings.

While domestic demand has been a key factor driving economic growth, there are indications thatrecord high inflation is dampening consumer confidence and spending. Growth in private consumptioneased to 4.7% y-o-y in Q108, from 5.1% in Q407 and 5.6% in Q307, although this was wellabove the 2.4% expansion recorded in Q107. While this does not represent a marked downturnin expenditure, more recent data point towards a far weaker performance in Q208. Consequently,the Monetary Authority of Singapore (MAS) continues to face a difficult balancing act due to theconflicting concerns of record high inflation and slowing growth.

Reflecting the openness of the economy, Singapore, alongside Hong Kong, has topped the WorldEconomic Forum’s Enabling Trade Index, which looks not only at conventional barriers to tradesuch as tariffs, but at factors such as the time taken to cross borders and transport conditions toassess trade policy. Singapore’s superior trade environment is reflected in the city state’s scoreof 95.6 out of 100 in the openness component of BMI’s business environment ratings, rankingit second only to Hong Kong out of the 167 economies assessed. However, Singapore’s overallbusiness environment score of 83.8 sees it sit proudly atop our overall ratings, with rival HongKong slipping into third.

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Singapore Business Forecast Report Q4 2008

Table of Contents

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