Singapore releases third-quarter GDP data, monetary policy statement

Gantry cranes stand at the Port of Singapore in Singapore, on Friday, July 12, 2019.Ore Huiying | Bloomberg | Getty ImagesSingapore’s economy — often seen as a bellwether for global growth — avoided a technical recession after growing by 0.6% in the third quarter, compared to the previous three months.That quarter-on-quarter expansion marked a reversal from the 3.3% decline in the April-to-June period, official advance estimates by the Ministry of Trade and Industry showed on Monday. On a year-on-year basis, Singapore’s economy grew 0.1% in the third quarter.Economists polled by Reuters had expected Singapore’s gross domestic product from July to September to increase by 1.5% quarter-on-quarter and 0.3% year-on-year.A technical recession happens when there are two consecutive quarters of economic contraction. Talks of a global recession have heightened in recent months as the U.S.-China trade war continued to drag on.In a separate announcement on Monday, Singapore’s central bank said it has eased monetary policy by reducing the slope of the Singapore dollar policy band — referred to as the Singapore dollar nominal effective exchange rate, or S$NEER.The central bank adjusts monetary policy by managing the exchange rate of the Singapore dollar against a basket of currencies of its major trading partners. The policy band’s slope, width and center, as well as the currencies that the Singapore dollar is measured against, are not disclosed.The Monetary Authority of Singapore announced Monday there’s no change to the width and center of the Singapore dollar’s trading band. That means the central bank has moderated the pace at which the local currency would appreciate against the basket of currencies.Singapore, a tiny country in Southeast Asia, has one of the highest trade-to-GDP ratios in the world. That makes its economy highly sensitive to global trade flows and business cycles.The country’s small domestic market — with a total population of 5.7 million — means Singapore “will never be able to offset external demand slack,” Song Seng Wun, an economist at Malaysian bank CIMB Private Banking, told CNBC’s “Street Signs Asia” on Friday.”All we can really do is try to protect jobs here,” said Song, adding that it can be done by accelerating infrastructure and social spending.

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