Newswire.co.kr, 24 Nov 2008
Seoul (Korea Newswire) November 24, 2008 01:24 PM -- Conditions across Asia continue to worsen. Japan and Singapore are ‘officially’ in recession, and growth in most other countries is slowing. Exports are slowing sharply, and investment is also weak. There is a growing realisation that problems in the U.S. are more protracted than first thought and that conditions will not return to the way they were a few years ago any time soon, if ever.
The global downturn has hit Singapore hard. Output has now fallen quarter on quarter for two consecutive quarters, placing the economy in a technical recession, with output in the third quarter lower than it was a year ago. It seems that most of the sectors that Singapore’s economy is built around have been hurt in some way by the global financial crisis and subsequent downturn.
Singapore is heavily dependent on external demand, and the drop in nonoil domestic exports such as electronics and pharmaceuticals is hurting manufacturing. Part of this is due to weak demand in Western countries, but part of this is the rise of competitive producers elsewhere. Mobile phone production has been shifting to other countries such as China and Taiwan. Domestic producers may have been handicapped by the rising currency, which the Monetary Authority instituted to dampen inflation. It stopped currency appreciation after its October meeting, and could switch to depreciation at its next meeting in April.
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