Singapore: Economy abject; fiscal stimulus likely

Economist, Centennial Asia Advisors

Jason Tan

Economist

Centennial Asia Advisors

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<p><strong>Singapore: Despite upward revision to 3Q15 GDP, economy remains on tenuous footing</strong></p><ul><li>While it was a small positive, the upward revision to 3Q15 GDP is a short-lived joy as the economic fundamentals continue to deteriorate. Manufacturing contracted while construction activity decelerated. The services sector continued to be the sole bright spot, driven by the wholesale &amp; retail trade and finance &amp; insurance sectors.</li><li>Other economic indicators also reflect the poor state of the economy: Trade is sluggish, industrial production contractionary, while the CLI and PMI points to near-term softness and productivity remain stagnant.</li><li>The central bank has done as much as it can within the confines of its monetary regime, policy response has to come from fiscal measures and other administrative support.</li></ul>

Singapore: Despite upward revision to 3Q15 GDP, economy remains on tenuous footingWhile it was a small positive, the upward revision to 3Q15 GDP is a short-lived joy as the economic fundamentals continue to deteriorate. Manufacturing contracted while construction activity decelerated. The services sector continued to be the sole bright spot, driven by the wholesale &amp; retail trade and finance &amp; insurance sectors.Other economic indicators also reflect the poor state of the economy: Trade is sluggish, industrial production contractionary, while the CLI and PMI points to near-term softness and productivity remain stagnant.The central bank has done as much as it can within the confines of its monetary regime, policy response has to come from fiscal measures and other administrative support.

Singapore: Weak Fundamentals Require Stronger Policy Response