The Week In Numbers – Slow, Slow, Quick, Quick

Singapore is now expected to grow a tad slower than forecast. The Monetary Authority of Singapore said the economy could expand 2.8% this year, rather than by its earlier estimate of 3.1%. In reality, the slower rate of economic growth is still quite respectable. Additionally, it falls within the official projection of between 2% to 4%.

That said some sectors of the economy might have to shoulder a bigger share of the burden. In particular manufacturers that are dependent on exports to China could be some of worse affected.

Another sector that could feel the pain might be the construction industry. Last month, City Developments (SGX: C09), warned that headwinds could persist for the Singapore market due to headwinds in the global economy.

The headwinds were all too apparent from the worst-than-expected 9.7% drop in Non-Oil Domestic Exports in February. The year-on-year decline is the steepest fall in nearly two years. The poor showing was attributed to disappointing exports to China, Japan and Taiwan.

On its own, the poor numbers might not mean much. But if other countries in the region perform badly too, then it could signal tougher times ahead. There are signs that speculators are already pessimistic and anxious about growth across the region, as the Singapore dollar loses steam.

The Singapore dollar fell to a 4-1/2 year low of 1.39 against the US dollar this week. What’s more, traders are speculating that the local currency could fall further. It is hard to say whether it is the Singapore dollar that is out of favour or whether the greenback is the flavour of the moment. It’s probably a bit of both.

On a brighter note, the economic fortunes of Asia could be transformed, if the China-led Asian Infrastructure Investment Bank continues to gain support. It could quicken the pace of infrastructure building in the region. The US$50b bank has already received the thumbs-up from the UK, France and Germany. Additionally, Japan has said that it could consider joining provided certain conditions are met.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore Director David Kuo doesn’t own shares in any companies mentioned.