Singapore’s Trade ministry released Q3 GDP data today showing a 0.64% year-over-year decline and the second consecutive decline on a quarter-over-quarter basis. The ministry also lowered their growth forecast for next year to a 1% contraction as demand for export is expected to continue to decline –increasing the likelihood that the Central Bank will pursue a weak currency strategy. If that is the case they are already off to a great start, Singapore’s currency has slipped 11% against versus the US dollar since July.
We like to keep an eye on Singapore. As one of the last true city-states they provide a fascinating economic vantage point into south Asia. If prospects are diminishing so rapidly for this mature economy, it raises question about the rosy growth assessments that central bankers in some of their large developing neighbors still espouse.