27 August 2011

Will Singapore continue its growth for this half of year?


Singapore is a global city that its GDP growth mainly contributed by the export sector. Of course after with two casinos opened recently, its reliance on export sector has been reduced, but it does not mean that it can be isolated from the recent Europe and America sovereign debt crisis. 
From Chinese perspective, the recent sovereign debt crisis were mainly due to over spending of the government in western countries and lack of the debt re-paying power. U.S. has spent a lot of money in the Iraq War and they could not find out any nuclear weapons there. A lot of money spent in wealthfare and rescuing the company that too big to fail (e.g. Citibank, GM etc) caused the U.S. government keep on spending the money to save the company from bankrupt and reduce the un-employment rate that already in the sky high record.
Singapore has its own problem to solve too. PM after post-election has promised to put emphasize on getting a balance in between "Talent System" vs "Singaporean Feeling". As too many Singaporean complaint about the un-loyalty of Singapore PR (e.g. especially for those who came study in Singapore with scholarship/sponsorship from Singapore Government and could easily get a PR after stay working in Singapore for 3 years). Some of them also blame that PRs and/or foreigners are the one who push the property price to a breaking record, that even higher before the 1997 financial crisis. 
We foresee there will be more policy that Pro-Singaporean instead of Pro-Business. If the labor cost keep on rising, the competitiveness of Singapore in Lower Skill Sector could change as well. I recently just saw a news saying that Foxconn would setup a factory in Iskandar Malaysia zone. I foresee that there will be more MNCs to setup its factory in that area, as the connectivity to Singapore is so near, and they could enjoy a lower tax rate under the Foreign Direct Investment scheme. 
Last but not least , I just paste the paragraphs from Singapore Yahoo: 
Source from;: 
http://sg.finance.yahoo.com/news/More-half-Singapore-rsg-4031833566.html?x=0
SINGAPORE, Aug 23 (Reuters) - More than half of the commercial payments made by Singapore companies were late in the second quarter of this year, adding to concerns that the economy may be falling back into recession, the Straits Times newspaper reported on Tuesday.
S
The paper cited a report by the Singapore Commercial Credit Bureau that 53.1 percent of all payments were late in the three months to June 30, up from 42.5 percent in the previous quarter.
Less than 40 percent of transactions were paid for promptly, the lowest level since the agency introduced the report in 2007. The report describes prompt payment as when at least 90 percent of all bills are paid within the payment period.
The construction sector has the worst record with 65 percent of transactions being classified as late, followed by the retail sector with a 62 percent late payment rate.
The city state's economy contracted 6.5 percent in the second quarter on a seasonally adjusted and annualised basis, while the government has narrowed the growth forecast for 2011 to 5-6 percent compared to an earlier estimates of 5-7 percent. (Reporting by Harry Suhartono; Editing by Kim Coghill)

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