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Singapore Business Forecast Report Q1 2010Published by: Business Monitor International Published: Oct. 30, 2009 - 60 Pages Table of Contents
AbstractSingapore’s economy is likely to see a continuation of the strong pick-up seen in Q209. Indeed,the economy shrank by a better-than-expected 3.5% y-o-y in Q209, significantly up from the 9.5%contraction seen in the preceding quarter. This is due in large part to a rapid pick-up in non-oildomestic exports and the efficacy of the government’s policies to limit unemployment. Going forward,with improving macroeconomic data from major economies around the world, Singapore’strade-dependent economy will be a beneficiary. We now expect GDP growth to contract at a lesssevere 3.6% (compared with 4.8% previously) in 2009, followed by a moderate rebound of 3.2%in 2010.Meanwhile, the government has taken steps to reassure citizens that the immigration rates in thecoming years will slow. In addition, several programmes have been launched to better integrateimmigrants with the local population. We view the government’s measures as a positive towardssocial stability and are precautionary steps taken in light of signs of friction seen recently betweenlocals and foreigners. That said, immigration is still important for population growth and the buildupof Singapore’s private consumption base over the longer term. We expect the government to pare down on policies including the Skills Programme for Upgradingand Resilience (SPUR) and the Jobs Credit scheme aimed at keeping unemployment downin 2010, in order to prevent the private sector from becoming too dependent on government aid. However, we think the government is likely to remove the measures in phases to prevent giving toobig a shock to the private sector. Coupled with an improving outlook in the economy, we believethe unemployment rate is unlikely to worsen significantly over the next 15 months and this shouldprovide considerable support to private consumption in 2010. Singapore’s fundamentals remain strong. Indeed, Singapore achieves high marks for the infrastructure,institutions and market orientation components of BMI’s business environment rating, takingthe top position with an overall score of 83.8, ahead of rival Hong Kong. Even though Singaporeis badly affected by the global slowdown, we do not expect the recession to have any lasting impacton the country’s investment apeal. Indeed, Singapore’s business-friendly policies and openeconomy place it in a good position to recover when the global economy picks up. Get Full Details About This Report >> |
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