Singapore Economy Growth

What a sombre way to greet 2008.


Singapore's Economy
According to economic reports, Singapore's economy grew by 6% (pulled down by falling manufacturing output) in the fourth quarter of 2007 instead of Economist projection of 7.0-8.5%. Overall GDP for 2007 grew by 7.5% in 2007 while growth for 2006 was 7.9%. Growth for 2008 is also projected lower at 4.5 - 6.5% for this year. (Source : http://news.sg.msn.com/article.aspx?cp-documentid=1170943)


United States' Economy
The US manufacturing has also contracted in December after 10 continous months of growth, sinking to its lowest point in 5 years. The decline suggested that the overall (US) economy may be weakening faster than most economist predicted.


Refering to my previous post, the few signs of looming recession includes:
- falling job rate
- falling manufacturing output
- housing downturn
- falling interest rates, etc.


Slowdown in manufacturing can translate to job cut, in turn, lesser consumer spending, causing more slowdown in the economy.


Nomura chief economist David Resler said December results can sometimes be skewed by seasonal variation in orders, so January will be very closely watched to see whether the sector will keep falling.

"I think the troubling thing is not just that it was so low, and it is at a level that is typically breached only in recession, but that it's continuing in a downward trend," Resler said, noting that the index has been dropping since June.


(Source : http://biz.yahoo.com/ap/080102/economy_manufacturing.html)


Let's hope US economy doesn't face another month of slowdown.


China's Economy
China's economy on the other hand faces double digit growth sine 1978. China has overtaken the US in global GDP growth. This can be a cause for concern. The biggest worry is that the economy is overheating and inflation surging out of control.


The Chinese Government had to freeze government controlled prices such as oil, electricity and water, to curb inflation a little.


(source : http://www.economist.com/finance/displaystory.cfm?story_id=9861591)


What Next
Even though US is no longer the largest contributor to global GDP, it is still the No 1 economy in the world. Any setback in US will have some impact to global economy. Afterall, US is still the No 2 trading partner to Singapore (Export - 10.2%. Import - 12.7%).
(source : https://www.cia.gov/library/publications/the-world-factbook/geos/sn.html#Econ)

Any sneeze in the US economy will have some direct impact to us. Signs have shown since more than half a year ago, that the US economy is heading for trouble (credit crunch) but yet, people here are spending unnecessarily on unrealistic commodity (eg. changing car every 3 years or lesser). Isn't it more sensible to plough our funds to proper investment that can survive time and upsets, yet giving us more to spend in the future?