Thursday October 02, 2008

Singapore economy falling into technical recession as exports fall

This article belongs to the Singapore recession watch story arc.

channelnewsasia.com :

A decline in Singapore's main exports for the fourth straight month has raised prospect of the economy falling into a technical third-quarter recession. Singapore's non-oil domestic exports (NODX) in Aug 2008 fell 14% from the same month last year as shipments for both electronics and non-electronics goods tumbled. Exports of electronics goods fell 19% year-on-year, continuing a decline that began in Feb 2007. Non-electronics exports fell 9.6%, led by pharmaceuticals which were down 45.2%. Shipments to 9 of Singapore's top 10 NODX markets shrank.

A technical recession is defined as two consecutive quarters of quarter-on-quarter contractions in the GDP, the total value of goods and services produced in a country. On an annualised, quarter-on-quarter basis, Singapore's GDP contracted 6% in the June quarter from the previous three months. Singapore's economic growth, on a year-on-year basis, slowed to an annual rate of 2.1% in Q2 2008.

- This is becoming an outright economic contraction, with electronics exports falling 19% and pharmaceuticals falling 45%. At the moment they are labelling it a "technical recession" as if it were some mere technicality. If this goes on, and all indications are that it will, the "technical recession" will become a real one. All it takes is for actual year-on-year GDP figures to go negative for two consecutive quarters, instead of the extrapolated quarter-on-quarter figures that currently define the "technical" recession. Chances of a turnaround at this point are slim. We are heading down.

See also :

1. Singapore industrial production unexpectedly dropped in Apr 2008 on drugs, electronics
2. Singapore stagflation : May 2008 exports fell most in 17 months; inflation at 26-year highs
3. Singapore GDP shrinks 6.6% in Q2 2008 as stagflation continues
4. Singapore retail sales growth slows as inflation hurts spending

(2008-10-02 10:47:46 SGT) [Biz] Permalink

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