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The Port of Singapore is one of the most relevant Global Trade ports in the world. In 2005, in terms of shipping tonnage, it surprised some economists when it was named the busiest port in the world. Singapore is also one of the four “Asian Tigers” – when it slows like we forecasted it to, you should pay attention. Commodities are deflating because global economic growth is slowing expeditiously.

Alongside a massive slowdown in their quarterly GDP growth rate, last night the government of Singapore issued a warning that their export growth could come in as bad as -4% year over year. Provided that local inflation remains elevated, this all but assures Singapore of reporting flat to negative real growth in the coming quarters.

Economic growth in Q2 slowed materially, to +2.1% versus the +6.9% seen in Q1 of 2008. The Singapore Dollar has been under fire in recent months – now the masses know what the locals knew. At 1.41 per US$, Singapore’s currency is trading at a 5 month low.

Export growth in Singapore has not been negative since 9/11/01. That slowdown was prefaced by a global terrorist alert – this one is purely based on the reality that what goes up, must eventually come down.

It is global this time, indeed.
KM