Tough Year for SIN

The year of the horse has been tough for so many. Singapore is definitely no exception.

The city of SIN (Singapore’s airport code) had a decent Q3, but overall 2014 is starting to look like a loser.

Singapore’s Ministry of Trade and Industry (MTI) yesterday said that it expects growth for 2014 to be around 3% this year, down from 3.9% in 2013. MTI also expects the economy to expand only 2–3% in 2015.


Although the global economy has had a few bright spots here and there, overall trade has been muted at best. World Trade Organization (WTO) economists reduced their forecast in September after sup-par trade growth in the first half of the year. World trade growth is now reduced to 3.1% (down from the 4.7% forecast made in April). This reduction also made them re-estimate and cut 2015 trade growth to 4.0%, from 5.3% previously.

Singapore’s Q4 looks to be hit by slower growth in sectors depending heavily on trade, with manufacturing, transport, and storage likely to be slower than the same time last year. Construction is also expected to slump because of weak private-sector building activity.

Finance and the insurance sectors did better than expected in Q3 and helped the economy exceed expectations for the period. Manufacturing also did better, helping the economy grow 2.8% in Q3.

It appears that one of the only bright spots for the global economy is the United States. A recovery appears to be under way there even as the EU looks more and more like a basket case, Japan has now entered recession after reporting two consistent negative quarters, and China still (seemingly always?) teetering on the edge of the abyss with the end of its speculative real estate bubble and a tired annual growth rate.

Many see China as the elephant in the room in 2015 that could seriously dampen Singapore’s highly developed trade economy. China and Japan are some of Singapore’s biggest trading partners.

One positive note for Singapore, and the global economy as a whole, is the dropping price of oil. The net benefits of cheap oil for consumers and trade economies like Singapore could turn 2015 from meh to smiles for many.

H/T: Asia One