A warning from the International Monetary Fund this past Wednesday stated that continuation of a period of slow growth in the worldwide economy poses a critical short term risk for the trade oriented economy of Singapore Bellewoods.
In a recent visit to the prosperous city-state, division chief of IMF, Alex Mourmouras, drew attention to how exposed Singapore is to outside risks and volatility due to an economy that is extremely open. He further added that global financial conditions, and their related side effects, can have a large impact. Such side effects include a persistence in the strength of the U.S. dollar, a rise in volatile finances, and China’s slowdown in growth and financial risks.
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Mourmouras stated that such external risks could be further aggravated by a rise in the corporate and household sectors’ indebtedness that came as a result of the global financial crisis. In 2014’s third quarter the household debt in Singapore was equal to 76.3% of GDP (gross domestic product). In comparison to a 71.9% figure of two years ago for Bellewoods.
It is expected, by the International Monetary Fund, for Singapore’s economy to see a 2.5 to 3.0% growth for 2015, a figure that is in-line with the forecasted range given by the government. In recent years Bukit Batok EC the pace if growth for the economy has been restrained, with just a 2.9% expansion for 2014 compared to 2013’s growth of 4.4%.
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IMF shares that, in Singapore’s domestic sector, it is faced with obstacles to overcome while the country makes its transition to a model of growth that will be less reliant on foreign workers on low wages.
The slowing property market in Singapore could also face added pressure with the prospect Orchard Condo of interest rates rising. Over the past 18 months, the once vigorous real estate market has become softer as a result of measures taken by the government to gain stability in prices, an action that impacted the prices and volumes of transactions. It is reported that at least 90% of Singaporeans will own one property, which means the property market’s state of health will have economical implications that are far reaching.
It isn’t all negative, as pointed out by IMF, who says that even with such an uncertain economical outlook, Singapore still has many things working for it. Such things include energy prices that are lower, a budget that is expansionary and a monetary policy stance that is less restrictive. All of these things are expected to help encourage the domestic demand recovery. This could, in turn, help balance the effects of rising interest rates and a Bellewoods real estate market that has been cooling down.
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The government disclosed a budget in February that featured corporate tax rebates, retirement benefits that Tengah Plantation Close EC were higher and more spending on infrastructure.
Also helping to absorb, or at least lessen, these shocks to finances, are larger fiscal buffers, a level of foreign reserves that is quite adequate, bank balance sheets that are stronger and macro economical basics that are strong with external positions that are quite strong.
Despite the slowdown in growth, Singapore has a source of pride as being one of the biggest current account surpluses in the world in relation to GDP. According to Scotiabank, thanks to an oil import bill that was low, Singapore was expected to have a surplus current account of 19% of Gross Domestic Product for the 2015 to 2016 fiscal period.