Tuesday March 25, 2008

Singapore : Bankruptcies sneak back despite good times

businesstimes.com.sg :

Despite full employment and robust economic growth, the number of people facing financial ruin has begun to rise. After falling from a high in 2004, the number of bankruptcy petitions and orders has begun to flatten and the delinquency rate for credit card holders has started to go up. Singapore Credit Bureau data shows that the number of delinquent credit card holders began rising steadily from July last year - a majority are between 21 and 44 years old, and men make up almost 70%. While the upward trend is far from alarming as it springs from a very low base, the situation could turn bleaker if the economy slows down and some people lose their jobs.

The economy expanded 7.5% last year and the unemployment rate was 2.1% - a 10-year low. The National Trades Union Congress (NTUC) said retrenchments hit a 14-year-low, while unionised firms paid out the fattest bonuses in 18 years. Yet people seem to be living beyond their means. "When the country is doing well, there's a feel-good factor and people just want to spend," said Mr Chan, who has been a banking litigation lawyer for some 15 years. He said the weekly list which comes out for bankruptcy hearings includes professionals such as lawyers and doctors.

- This is a noteworthy article about the bankrupt situation in Singapore. The contrarian community is of the opinion that credit card defaults are the proverbial "next shoe to drop" after the mortgage/subprime crisis, and it looks like Singapore is continuing to follow America's footsteps, albeit with a time lag of a few months or so.

See also :

1. Singapore economy stuck in mud : inflation rising, M3 falling, GDP crashing - the stagflation formula
2. Singapore 2007Q4 GDP contracted 4.8%, 2008 economic growth forecast lowered
3. Singapore economy shrinks first time since 2003
4. Singapore CPI inflation hits 6.6% in Jan 2008 - a new 25-year record high

(2008-03-25 00:09:48 SGT) [Biz] Permalink

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