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17 September 2014 RECENT ECONOMIC DEVELOPMENTS IN SINGAPORE 4 September 2015 2014 Q3 Q4 2015 Full Year Q1 Q2 Real Sector Real GDP Growth, y-o-y % 2.8 2.1 2.9 2.8 1.8 Real GDP Growth, q-o-q saar % 2.6 4.9 - 4.1 −4.0 Index of Industrial Production, y-o-y % 1.7 −1.2 2.7 −2.6 −4.9 Non-oil Domestic Exports, y-o-y % 1.1 0.5 −0.7 4.8 2.1 Unemployment Rate, sa, % (Average) 1.9 1.9 2.0 1.8 2.0 CPI-All Items Inflation, y-o-y % 1.0 0.0 1.0 −0.3 −0.4 Wage Growth, y-o-y % 2.4 0.8 2.3 3.0 3.7 Labour Market and Prices The Singapore economy contracted in Q2 2015 Singapore’s GDP declined by 4.0% q-o-q saar (quarter-on-quarter seasonally-adjusted annualised rate) in Q2 2015, following a 4.1% expansion in the previous quarter. The contraction stemmed largely from the trade-related sectors, which were buffeted by external headwinds arising from a moderation in regional growth, continued slowdown in oil exploration activities and softer global demand for electronics. Moderate global growth is expected in 2015, with risks tilted to the downside While the pace of growth in the G3 economies dipped slightly to 1.6% q-o-q saar in Q2 2015 from 1.8% in Q1, a gradual pickup in the coming quarters should help to counter-balance the weaker performance expected in Asia-ex Japan. However, potential financial stresses arising from US policy normalisation, as well as persistent weakness in the Chinese economy, pose downside risks. Singapore’s GDP growth is projected at 2–2.5% in 2015 Growth in the domestic economy is expected to keep to a modest pace for the rest of the year. A gradual improvement in the advanced economies should provide some support to pockets of trade-related industries, amid weakness in regional demand. Meanwhile, domestic demand will remain broadly resilient despite ongoing supply-side constraints as firms continue to take steps to boost productivity. Inflation should remain subdued in the near term Over the next few months, MAS Core Inflation is expected to hover around the current rate while CPI-All Items inflation could ease further, given the dampening effects of car prices and imputed rentals on owner-occupied accommodation. For 2015 as a whole, MAS Core Inflation and CPI-All Items inflation are projected to come in at the lower half of the forecast range of 0.5–1.5% and −0.5–0.5% respectively. Is i Monetary Authority of Singapore Economic Policy Group A. External Developments G3 growth eased in Q2 2015 The pace of expansion in the G3 economies moderated slightly to 1.6% q-o-q saar in Q2 2015, from 1.8% in Q1, mainly on account of an output contraction in Japan. Unsurprisingly, the US economy rebounded from an unusually weak first quarter, but the Eurozone expanded slightly slower than expected. Economic activity in the G3 economies should pick up from the underlying pace seen in H1 2015, lifting average GDP growth to 1.7% this year and 2.1% in 2016, from 1.3% in 2014. The US economy posted a strong rebound after a weak first quarter. GDP growth in Q2 12 2015 came in at 3.7% q-o-q saar, a marked improvement from an upwardly revised 0.6% 8 in Q1, as the effects of one-off factors US 4 dissipated. Reflecting some pent-up demand, 0 consumers increased their overall spending Eurozone by 3.1% q-o-q saar. Despite the stronger US -4 dollar, the contribution of net exports to Japan -8 aggregate growth swung from −1.9% points in 2010 2011 2012 2013 2014 2015 Q2 Q1 to 0.2% point in Q2, buoyed by a sharp Source: Datastream and CEIC turnaround in goods exports, as the effects of West Coast port disruptions in Q1 faded. However, gross private investment slackened somewhat, chiefly due to a 0.4% retraction in equipment spending. Residential investment growth also eased to 7.8% q-o-q saar in Q2, after posting double-digit rates of expansion in the previous two quarters. % QOQ SAAR Growth in the US and Japan diverged in Q2. The US economy is on track to achieve moderate growth for the rest of the year. Private consumption spending will remain the lynchpin of economic activity, supported by a steady decline in the unemployment rate to 5.3% in July. Retail sales increased by 0.6% m-o-m in July, compared to an average 0.2% rise over H1 2015, marking a strong start to consumption spending in Q3. However, relatively modest wage gains, as reflected in a 2.0% y-o-y increase in the employment cost index in Q2, could limit the extent of the consumption upswing. Meanwhile, the ongoing recovery in the housing market should provide further support to both household spending and residential investment. Home prices have continued to trend upwards, while housing starts and new home sales are at healthy levels. On the downside, a sequential correction of the build-up of business inventories in Q2 could weigh on growth in the near term. On balance, US GDP growth is expected to come in at 2.3% in 2015, before rising to 2.7% in 2016. The Eurozone performed slightly below expectations. The region’s growth in Q2 eased marginally to 1.3% q-o-q saar from 1.5% in Q1, as domestic demand in Germany and France slackened. In Germany, a rebound in exports led to faster growth, although the extent of Monetary Authority of Singapore 2 Economic Policy Group the improvement was mitigated by a pullback in construction investment and inventory destocking. France’s economy stagnated in Q2 despite a positive contribution from net exports, as consumption spending slowed sharply. Similarly, the pace of expansion in Italy and the Netherlands decelerated, although both countries managed to maintain positive growth. The Eurozone’s best performer was Spain, which chalked up robust growth of 4.0% in Q2, driven by a strengthening labour market. Greece also posted an unexpectedly strong expansion of 3.7%, in part because consumers and firms frontloaded spending in anticipation of the imposition of capital controls, which became necessary as deposit flight quickened towards the end of the quarter. Economic conditions in the Eurozone will be buttressed by lower oil prices, improving credit conditions and a stronger export performance. The fall in oil prices since May is expected to provide additional support to consumption spending through a boost to real incomes. Further, the European Central Bank’s (ECB) quantitative easing (QE) programme has resulted in a narrowing of the gap between borrowing costs in Germany and the rest of the Eurozone, which should stimulate credit creation in the peripheral economies. At the same time, the impact of euro depreciation will continue to feed through, as shown by a recent pickup in the Eurozone’s trade flows and a notable rise in export orders. However, the slowdown in emerging market economies could partially neutralise the gains from a weaker exchange rate. On balance, Eurozone growth is projected to firm to 1.5% in 2015 and 1.8% in 2016. The Japanese economy contracted in Q2 2015 following a strong first quarter. Growth fell to −1.6% q-o-q saar in Q2 2015 from 4.5% in Q1, largely due to a cutback in private consumption and a decline in net exports. After expanding for three straight quarters, household spending fell by 3.0% due in part to unseasonable weather, subtracting 1.8% points from GDP growth in the second quarter. Meanwhile, exports plunged by 16.5% in Q2 amid lacklustre external demand, particularly from the region. Nonetheless, both public investment and private residential investment growth provided some offsetting support, with the former surging by 10.7% q-o-q saar and the latter expanding at a firm clip of 8%. After a double-digit increase in the previous quarter, non-residential investment languished in Q2. In the second half of the year, a gradual pickup in domestic demand should support a modest recovery in Japan. While incomes have not picked up discernibly so far despite a decline in the unemployment rate, continued tightness in the labour market and higher pay-outs from this year’s wage negotiations should provide support to private consumption in the next few quarters. Nonetheless, the Japanese economy faces near-term downside risks and strong regional headwinds. Industrial production in Q3 2015 will be hampered by the build-up in inventories in earlier quarters, while subdued growth in China and the ASEAN economies—major markets for Japan—could pose a drag on exports. Overall, the Japanese economy is projected to grow by 0.8% in 2015 and 1.7% in 2016. Monetary Authority of Singapore 3 Economic Policy Group CPI inflation in the G3 economies remained at 0.1% y-o-y in Q2 2015, unchanged from 4 Q1. US consumer prices were flat on a y-o-y Japan 3 Eurozone basis in Q2, after a small decline in Q1. Core 2 inflation was stable at 1.8%, reflecting US diminishing spare capacity in light of a 1 tightening labour market. In the Eurozone, 0 headline inflation rose to 0.2% y-o-y in Q2, -1 from −0.3% in Q1, as the negaƟve impact of -2 2010 2011 2012 2013 2014 2015 low fuel prices were offset by the euro’s Q2 depreciation. In comparison, core inflation Source: Datastream and CEIC ticked up only slightly to 0.8% from 0.7%, suggesting that substantial slack remains in the region. In Japan, headline CPI inflation fell sharply to 0.5% y-o-y in Q2 from 2.3% in Q1, largely on account of high base effects from the April 2014 consumption tax hike. Stripping out the effects of the tax increase, inflation on a year-ago basis in Q2 rose by 0.2% point from the preceding quarter. With global oil prices likely to remain below 2014 levels for some time, the headline inflation rate in the G3 economies is projected to average 0.4% in 2015, with an increase to 1.6% seen in 2016. % YOY G3 inflation remained low in Q2. Asia ex-Japan growth softened in Q2 2015 Economic activity in Asia ex-Japan slowed to 4.7% y-o-y in Q2 2015 from 5.0% in Q1. The 14 lacklustre Chinese economy and slumping 12 global commodity prices depressed trade 10 flows within the region, which accentuated India China 8 subdued demand from the advanced 6 ASEAN-4* economies. Weak exports in turn weighed on 4 domestic demand in the ASEAN-4 economies, 2 NEA-3* even as country-specific factors posed further 0 2010 2011 2012 2013 2014 2015 drags. In the second half of 2015, the region Q2 will have to confront additional growth Source: CEIC and EPG, MAS estimates * Regional groupings are weighted by Singapore's non-oil dampeners and risk factors such as a rise in domestic exports (2009–13 average). borrowing costs, capital outflows, and Note: NEA-3 refers to Hong Kong, Korea and Taiwan while ASEAN-4 refers to Indonesia, Malaysia, Thailand and the possible financial stresses arising from high Philippines. debt levels. Taking these into account, growth in Asia ex-Japan is expected to come in lower at 4.8% for 2015, compared to 5.2% in 2014. % YOY Growth in Asia ex-Japan eased in Q2. China’s GDP grew by 7.0% y-o-y in Q2 2015, the same pace as in Q1. In sequential terms, growth accelerated to 1.7% q-o-q sa, from 1.4% in the previous quarter. Nonetheless, the expansion was uneven and primarily driven by the services sector, with a large contribution from financial services. In Q2, as China’s stock market was reaching its peak, equity trading raised financial sector value-added by 17.4% y-o-y year-to-date, fuelling an 8.4% rise in the Monetary Authority of Singapore 4 Economic Policy Group output of the tertiary sector. Meanwhile, industrial production growth edged down further to 6.3% y-o-y in the second quarter, weighed down by excess capacity and flagging orders. However, there are tentative signs that China’s property market is beginning to recover, as commodity real estate sales posted growth of 13.3% y-o-y in Q2 2015—the first expansion in six quarters. Still, construction starts declined in the quarter, as developers cleared their housing stocks instead of building new units. Consequently, fixed asset investment growth continued to downshift, falling from 13.5% y-o-y year-to-date in Q1 this year to 11.4% in Q2, in spite of robust infrastructure spending. Growth in retail spending also slipped to 10.2% y-o-y from 10.6% in the preceding quarter, alongside an easing of labour market conditions. Negative sentiment in the wake of the recent stock market turbulence will cloud China’s growth outlook in H2 2015. While direct effects on consumer spending and private sector investment are not expected to be sizeable, the slump in stock prices will further dent already fragile sentiment and reduce the contribution of financial services to GDP growth. The concurrent declines in the official and Caixin manufacturing PMIs in August, to 49.7 and 47.3 respectively, point to further production weakness and sluggish domestic and external demand. Nonetheless, the Chinese authorities are expected to continue with policy support to stabilise growth. In addition to successive rate cuts and reductions in reserve requirements since late 2014, the government has been steadily ramping up infrastructure investment, tapping on policy bank lending and seeking to ease local governments’ financing constraints. As a result, China’s GDP growth is projected to be 6.9% this year, close to the official target, before dipping to 6.7% next year. India’s GDP growth remained firm in Q2 2015, driven by strong domestic demand. The economy grew by 7.0% y-o-y in the second quarter, slower than the 7.5% registered in Q1. Private consumption made the largest contribution of 4.3% points to overall growth. Meanwhile, gross fixed capital formation growth picked up to 4.9% y-o-y in Q2, from 4.1% in the previous quarter, in tandem with the Modi administration’s measures to raise infrastructure spending. With the start of the new financial year, government expenditure increased by 1.2% y-o-y in Q2 2015, following a contraction in Q1 when the government cut back on spending to meet the full-year fiscal target. Looking ahead, the momentum in the Indian economy is expected to be sustained, with growth projected at 7.7% in FY20161 and picking up further to 8.0% in the following year. Economic activity in the NEA-3 economies shrank in Q2 2015, as exports were hit by China’s manufacturing slowdown. The combined GDP of Korea, Taiwan and Hong Kong contracted by 0.9% q-o-q saar in Q2, after expanding by 2.9% in Q1. Despite resilient domestic demand in Taiwan and Hong Kong, sagging trade with China depressed growth outturns in both economies. Taiwan’s GDP contracted by 6.6% q-o-q saar after an increase of 2.3% in Q1, while Hong Kong’s economic growth eased to 1.6% q-o-q saar from 3.0% in 1 India reports its economic figures on a Financial Year basis. FY2016 refers to the period from April 2015 to March 2016. Monetary Authority of Singapore 5 Economic Policy Group the preceding quarter. In Korea, the onset of the MERS pandemic in June compounded the retrenchment in external demand, dragging growth in Q2 down to 1.3% q-o-q saar. Looking ahead, the expected strengthening of demand from the advanced economies and consumer IT product launches in Q3 should boost shipments modestly in Korea and Taiwan, and provide some support to manufacturing activity. Meanwhile, favourable labour market conditions in Hong Kong should underpin private consumption growth. However, a sharper deceleration in China’s economy and currency adjustments in Asia following the recent RMB devaluation pose downside risks to the NEA’s near-term economic outlook. On the whole, the region’s growth is forecast to slow to 2.5% in 2015, before rising to 3.0% in 2016. In the ASEAN-4 economies, domestic demand has begun to moderate in the face of persistent external headwinds and country-specific factors. Slowing demand from China and the global slump in commodity markets have severely dampened exports of commodities and manufactured products, with outright contractions in goods exports registered by most countries. The weak export performance over the past few quarters has also started to exert a drag on domestic spending. In Malaysia and Thailand, private consumption growth moderated sharply in Q2 due to weak wage and farm income growth, as well as poor consumer sentiment. Household spending in Indonesia stayed fairly resilient in Q2, but its growth has downshifted compared to a year ago. In line with the deceleration in manufacturing and mining activities, businesses in most ASEAN-4 countries have held back capital expenditures on machinery and equipment. Nevertheless, public spending has picked up in most economies, providing some offset to the weakness in private domestic demand and exports. There was a ramp-up in investment spending in Thailand as well as higher public consumption expenditures in Malaysia, Thailand and the Philippines. Among the ASEAN-4 countries, Malaysia saw the largest pullback in growth, from 5.6% y-o-y in Q1 2015 to 4.9% in Q2, reflecting the highly open nature of its economy, its heavy exposure to commodities, as well as the effect of idiosyncratic factors such as the implementation of the Goods and Services Tax (GST) in April this year. Indonesia registered stable GDP growth of 4.7% y-o-y in Q2 in spite of subdued domestic demand, owing to severe import compression, particularly in capital goods. In Thailand, GDP growth dipped marginally from 3.0% y-o-y in Q1 to 2.8% in Q2, even though the economy was supported by buoyant tourism-related activities. The Philippines saw a pickup in GDP growth, from 5.0% y-o-y in Q1 to 5.6% in Q2, although the improvement was mainly due to stronger inventory accumulation. The ASEAN-4 economies are projected to grow by 4.5% in 2015, slightly weaker than last year’s 4.7%. Within the region, growth outcomes are expected to diverge significantly. Malaysia is expected to see a sharper deceleration in growth, from 6.0% in 2014 to 4.5–5% this year. Oil and gas exports are expected to stay flaccid, even as private sector activity softens with elevated household indebtedness and weakening consumer and business confidence. In Indonesia, GDP growth will stay at around 5% for the second year in a row, a step-down from the historical average of 6% in 2010–13. The country’s commodity-related industries are being negatively affected by prolonged price weakness and muted demand, particularly from China. The Philippines is projected to turn in the best Monetary Authority of Singapore 6 Economic Policy Group performance in the region, growing by 5.5–6%, on the back of sustained strength in private consumption and the ongoing construction of basic infrastructure. GDP growth in Thailand is also expected to improve this year, but stay sub-par at around 2.5–3%. Economic activity will be increasingly driven by public sector construction, as growth in tourist arrivals moderates following a strong surge in H1 2015. Positive spillovers on private spending may come through only with a considerable lag, given subdued investor sentiment and the highly leveraged household sector. Headline inflation in Asia ex-Japan was largely contained in Q2 2015. CPI inflation 16 for the region as a whole rose marginally to 2.3% y-o-y in Q2 from 2.2% the quarter 12 before. Headline inflation in the ASEAN-4 India** economies rose slightly to 4.2% y-o-y in Q2 8 ASEAN-4* from 3.9% in Q1, owing chiefly to the 4 introduction of the GST in Malaysia and China NEA-3* higher food prices in Indonesia, which more 0 than offset lower inflation prints in Thailand 2010 2011 2012 2013 2014 2015 Q2 and the Philippines due to benign energy Source: CEIC and EPG, MAS estimates prices. China’s headline inflation also * Regional groupings are weighted by 2013 nominal GDP. ** India’s series uses CPI (Industrial Workers) prior to 2012. increased slightly in Q2 but remained mild at 1.4%, even as food prices rose at a faster pace as a result of resurgent pork prices. CPI inflation in the NEA-3 declined to 0.6% y-o-y in Q2 on the back of restrained oil prices, while headline inflation in India also eased to 5.1% on lower food inflation. Given developments to date and easing growth momentum, headline inflation in Asia ex-Japan is projected to moderate to 2.3% in 2015, before rising to 2.9% next year. % YOY CPI inflation stayed subdued in Asia ex-Japan. Monetary Authority of Singapore 7 Economic Policy Group Table 1: Consensus Forecasts of GDP Growth Industrial US Japan Eurozone UK NEA-3 Hong Kong Korea Taiwan ASEAN-4 Indonesia Malaysia Thailand Philippines China India* Forecast 2015 2016 Percent 2013 2014 1.5 1.6 −0.3 1.7 2.4 −0.1 0.9 3.0 2.3 0.8 1.5 2.6 2.7 1.7 1.8 2.5 3.1 2.9 2.2 2.5 3.3 3.8 2.3 2.6 2.6 2.6 3.3 3.3 5.6 4.7 2.8 7.1 7.7 5.1 5.0 6.0 0.9 6.1 7.4 6.9 4.8 4.8 2.9 5.8 6.9 7.3** 5.2 5.0 3.6 6.0 6.7 7.7 Source: CEIC and Consensus Economics, Aug 2015 *Refers to fiscal year ending Mar. **Actual GDP growth. Monetary Authority of Singapore 8 Economic Policy Group B. Domestic Developments Weakness in the trade-related Singapore economy in Q2 2015 industries weighed on the The Singapore economy saw some pullback in Q2 2015, with GDP falling by 4.0% q-o-q saar, following a 4.1% expansion in the preceding quarter. The weak outcome was largely on account of the trade-related industries. Notably, the manufacturing sector registered its largest decline since Q2 2011, against cyclical headwinds arising from cutbacks in global oil exploration activities and some softening in global demand for electronics. Trade-related services were also buffeted by a slowdown in the region. % Point Contribution to IIP QOQ SA Growth The manufacturing sector recorded a steep contraction of 18.3% q-o-q saar in Q2 2015. Manufacturing activities saw a broad-based retraction in Q2 2015. Apart from the chemicals industry, all other Electronics Chemicals Biomedical Precision Eng clusters experienced sharp declines, with the Transport Eng General Mfg Overall IIP transport engineering and biomedical sectors 9 6 accounting for around two-thirds of the 3 slump in overall production. While the 0 marine & offshore engineering segment -3 continued to be hampered by postponed rig -6 deliveries amid falling oil prices, a switch in -9 product-mix towards lower value-added 2012 2013 2014 2015 Q2 products posed a drag on pharmaceuticals output. Electronics-related output was likewise subdued—particularly in the semiconductor segment—on the back of a slowdown in global PC sales. Sluggish industrial production in turn impinged on activity in the trade-related service industries, as evident from the 4.1% q-o-q sa decline in total export volumes in Q2 2015. The pullback in intra-regional trade flows during the quarter further compounded the downshift in wholesale trade performance. Muted Asian import demand for capital goods, arising from weaker regional growth prospects, took a toll on Singapore’s wholesale trade in industrial machinery and transport equipment. Amid these regional headwinds, the transportation & storage sector registered a fall-off in activity. The decline was most pronounced in the water transport segment, where sea cargo volumes across both the container and bulk cargo categories contracted sharply. Following a lacklustre outturn in Q1 2015, activities in the financial services sector picked up in the recent quarter and expanded by 2.5% q-o-q saar. The support came largely from the sentiment-sensitive cluster, with the fund management industry recording strong growth. Concomitantly, average daily turnover on the local bourse rose by 29.7% q-o-q, its first expansion since Q1 2014, bolstered by a spurt of trading interest in April. However, investor sentiment was tempered in the latter half of the quarter as the escalation of the Greek debt crisis and the Chinese stock market rout triggered risk-off jitters. On the financial intermediation front, sluggish offshore non-bank lending was a dampener on Monetary Authority of Singapore 9 Economic Policy Group growth. ACU non-bank lending contracted by 0.3% q-o-q during the quarter, in part due to lacklustre credit demand from East Asia. Notably, trade financing extended to East Asian customers eased significantly, alongside the general slowdown in regional trade. Tourism-related activities saw a marginal improvement in Q2 2015, led by an uptick in visitor arrivals from the Southeast Asian economies. Nonetheless, arrivals from other major markets such as Europe and China fell across the board during the quarter, as compared to Q1. More broadly, the domestic tourism sector continues to be hampered by currency weakness in some regional economies. Consequently, accommodation & food services posted a sequential contraction of 1.4% q-o-q saar in Q2, after declining by 6.5% in the preceding quarter. Index (Q1 2010=100), SA Meanwhile, the domestic-oriented sector remained largely supportive of overall Construction activities remained firm in Q2. 180 growth, on the back of resilient building Residential Certified Payments activities. The construction sector recorded 160 its fourth consecutive quarter of growth, Civil Engineering 140 Certified Payments rising by 2.9% q-o-q saar in Q2 2015. The 120 increase in activity was driven mainly by the civil engineering segment as transport 100 Non-residential infrastructural works, such as the land Certified Payments 80 preparation works for Changi Airport 2010 2011 2012 2013 2014 2015 Q2 Terminal 5, continued apace. In the non- Source: EPG, MAS estimates residential segment, works on commercial projects—such as the CapitaGreen office tower and South Beach mixed used development—also gathered momentum. However, certified payments in the residential segment eased, with weak activity spilling over into real estate services growth, which stalled in Q2. Consumer-facing services turned in another quarter of modest growth, with overall retail sales volume expanding by 0.8% q-o-q sa in Q2 2015. The increase was driven by buoyant motor vehicle sales, which surged by 23.5% q-o-q sa on the back of sustained replacement demand for cars nearing the 10-year COE expiry mark. Retail sales excluding motor vehicle sales, however, fell for the second consecutive quarter, by 2.6% q-o-q sa, weighed down by declines in both the discretionary and sentiment-sensitive segments. The domestic economy is expected to expand by 2–2.5% in 2015 The Singapore economy is likely to be on a modest growth trajectory for the rest of the year. GDP growth is forecast to come in at 2–2.5% in 2015. Gradual improvements in the advanced economies, particularly the US, should impart some impetus to Singapore’s external-oriented industries. Expansions in the global IT industry, on the back of the launch of newer versions of smartphones and Windows 10 in Q3 this year, will also benefit certain pockets of the domestic electronics cluster. However, the extent to which the local IT Monetary Authority of Singapore 10 Economic Policy Group industry is able to leverage on such cyclical upticks will be capped by the ongoing transitions taking place, as some firms move towards higher margin activities such as chip design and delivery of IT services. At the same time, the synchronised slowdown in China and the ASEAN economies could weigh on demand for external-facing services, such as merchanting trade, transport & storage and accommodation & food services. More recently, the Bangkok bombings on 17 August could crimp demand for Southeast Asian tours with negative spillovers to Singapore’s tourism industry. Subdued growth prospects in the region may also dampen growth in offshore lending in the near term. The transport engineering segment continues to be buffeted by the downshift in global oil exploration activities amid sustained weakness in oil prices. The domestic-oriented sectors should continue to buttress overall growth for the rest of the year. In particular, the construction sector has a pipeline of public sector-driven projects in healthcare and education, as well as in transport infrastructure. Demand for information & communications services is also expected to be firm, underpinned by the government’s “Smart Nation” initiative, which includes procurement of a wide range of IT services and infrastructure.2 There are potential external and domestic headwinds to growth. Transitional drags in China from ongoing reforms and persistent weakness in residential construction activity could weigh on prospects in the region. Recent volatility in the Chinese stock and currency markets may also dampen investor and business sentiments in the near term. Further, the regional economies face the risk of capital outflows on account of the Fed’s impending interest rate hike, alongside a strengthening US dollar. In Europe, the issues surrounding the Greek bailout programme have not been resolved and policy missteps could still pose a setback to short-term growth in the Eurozone region. On the domestic front, there are challenges as the restructuring towards productivity-led growth proceeds apace. Notably, companies will face continued margin pressures amid the tight labour market environment. Notwithstanding the short-term challenges to growth, the restructuring exercise would facilitate Singapore’s transformation into a knowledgeand skills-intensive economy over the medium term, characterised by productivity-led growth. This is in line with Singapore’s evolving comparative advantage and will set the stage for a new phase of sustainable growth for a mature economy with binding resource constraints. 2 In May 2015, the government announced that it will be launching $2.2 billion worth of ICT tenders in FY2015 to procure digital and data services, web services, and information communications infrastructure to develop the Smart Nation Platform. Monetary Authority of Singapore 11 Economic Policy Group C. Labour Market and Consumer Prices Overall employment grew by 15,700 in Q2 2015 Preliminary estimates showed that overall employment expanded by 15,700 in Q2 2015, after contracting by 6,100 in the preceding quarter. The pickup reflected increased hiring in the construction and services sectors, and fewer job losses in the manufacturing sector. In line with the stronger expansion in public sector construction activities, headcount in construction grew by 7,800 in Q2 2015, after declining by 3,600 in the previous quarter. The services industries added 11,400 workers in the same quarter, significantly more than the 4,300 jobs created in the previous three months. The step-up in services employment was supported by the expansion in healthcare and social services, as well as the hiring of temporary workers due to the hosting of the SEA Games in June. The manufacturing cluster cut 3,500 jobs in Q2 2015, after shedding 6,900 workers in the previous quarter. The contraction in manufacturing employment reflected the ongoing restructuring in the electronics industry, while concurrently, lower oil prices continued to weigh down activity and hiring in the transport equipment segment, including the offshore & marine industry. Per Cent, SA Changes in Employment ('000) The unemployment rate picked up slightly in Q2 2015. Although the overall seasonally- The overall unemployment rate stayed low in adjusted unemployment rate rose from three Q2 2015. Construction Services Industry months ago, it stayed low at 2.0% in Q2 2015, Manufacturing Overall Unemployment Rate (RHS) 60 2.4 the same level as that a year ago. At the same time, the job vacancy rate remained high and 40 2.2 the incidence of redundancy fell. The number 20 2.0 of layoffs declined to 3,100 in Q2, compared to 3,500 in the preceding quarter. Reflecting the 0 1.8 tight labour market, wage growth rose to 3.7% -20 1.6 2010 2011 2012 2013 2014 2015 y-o-y in Q2 2015, from 3.0% in the previous Q2 quarter. However, the wage gain was uneven across sectors, being stronger in transport & storage, retail trade and community, social & personal (CSP) services, while weaker in professional services and information & communications. Looking ahead, the labour market will remain generally tight, with the vacancy rate elevated and the unemployment rate low. Wage pressures could be sustained in pockets of industries where manpower shortages are more acute, such as CSP, and in sectors facing relatively firmer demand conditions, such as construction. Monetary Authority of Singapore 12 Economic Policy Group CPI Inflation eased further in Q2 2015 % YOY Inflation has remained subdued, mainly reflecting the impact of sharply lower global MAS Core Inflation rose in July 2015, while CPIAll Items inflation eased. oil prices and Budget measures to help 6 CPI-All Items Inflation households cope with the cost of living. At the same time, the pass-through of domestic 4 costs to consumer prices was moderate, given the slower growth environment. As a result, 2 MAS Core Inflation MAS Core Inflation, which excludes the costs of 0 accommodation and private road transport, eased from 1.1% y-o-y in Q1 2015 to 0.2% in -2 Q2, before picking up slightly to 0.4% in July. 2010 2011 2012 2013 2014 2015 Jul CPI-All Items inflation was further dampened by the decline in housing rentals, edging down to −0.4% in Q2 2015 and July, from −0.3% in Q1. External price pressures continued to be weak. Prices of direct oil-related items3 fell by 10.4% in Q2 2015 following the 11.2% drop in Q1, due to a smaller decline in petrol pump prices as petrol duty rates increased. The overall decline in the prices of oil-related items moderated further to 8.0% in July, owing to a smaller reduction in electricity tariffs on a yearago basis.4 Meanwhile, food inflation eased to 1.9% in Q2 2015 and July, from 2.3% in Q1, as the impact of supply disruptions on regional food prices abated, and various temporary supermarket price discounts kicked in. Services inflation slowed to 0.7% in Q2 2015 and 0.6% in July, from 1.4% in Q1, as Budget measures, including the reduction in the concessionary foreign domestic worker levy and the waiver of national examination fees, dampened price increases in domestic services and education.5 Recreational & cultural services fees also fell in July on account of SG50-related price discounts for admission to some places of interest. Accommodation cost eased further, while private road transport cost fell slightly in July. Accommodation cost declined by 2.5% and 2.8% in Q2 2015 and July respectively, extending the 2.1% fall in Q1, reflecting the continued softening of the housing rental market. Private road transport cost rose by 0.1% in Q2 2015 and fell by 0.1% in July, compared to the 4.9% drop in Q1, mainly on account of fluctuations in COE premiums. 3 Direct oil-related items include electricity, liquefied petroleum gas and gas for domestic use, as well as fuels & lubricants (including petrol). 4 Compared to Apr–Jun 2015, electricity tariffs rose in July, given the increase in global oil prices in the previous quarter. The fuel cost component of the electricity tariff is based on the average forward fuel oil and dated Brent prices in the first two and a half months in the preceding quarter, and makes up approximately half of the electricity tariff. 5 As announced in Budget 2015, examination fees have been waived for Singaporeans in Government-funded schools taking the Primary School Leaving Examination (PSLE), Singapore-Cambridge General Certificate of Education (GCE) ‘N’, ‘O’ and ‘A’ levels, as well as for Singaporeans enrolled full-time in Polytechnics and Institutes of Technical Education (ITE). Monetary Authority of Singapore 13 Economic Policy Group External sources of inflation are expected to stay generally benign, given ample supply buffers in the major commodity markets. Notably, global oil prices are likely to be subdued and come in much lower for the whole of 2015 compared to the US$93 average recorded last year. Similarly, global food commodity prices should remain soft in the near term owing to abundant stockpiles, but they could recover subsequently given the risks to global food harvests from the El Niño weather phenomenon. Domestic price influences are likely to be contained. While some domestic cost pressures could persist due to the tight labour market, the extent to which businesses pass on accumulated costs to consumer prices could be tempered by the modest economic growth environment. At the same time, Budget measures6 will help to alleviate some of the price pressures faced by consumers. Going forward, MAS Core Inflation is expected to remain subdued in the near term. CPI-All Items inflation could ease further, given the dampening effects of car prices and imputed rentals on owner-occupied accommodation amid the anticipated increase in the supply of COEs and newly-completed housing units.7 MAS Core Inflation and CPI-All Items inflation could rise towards the end of the year and are expected to pick up further in 2016, as the effects of the budgetary measures and the drag from the earlier fall in global oil prices dissipate on a year-ago basis. For 2015 as a whole, MAS Core Inflation and CPI-All Items inflation are projected to come in at the lower half of the forecast range of 0.5–1.5% and −0.5–0.5% respectively. 6 The recent budgetary measures include the reduction in the concessionary foreign domestic helper levy, the one-year road tax rebates, and the abolition of national examination fees for Singaporeans. These are on top of the increase in medical subsidies, which will continue to dampen inflation on a year-ago basis until early 2016. 7 CPI-All Items inflation is expected to be lower in August 2015, largely due to the significantly higher base in August last year when COE premiums surged. Monetary Authority of Singapore 14 Economic Policy Group D. Macroeconomic Policies Monetary Policy: MAS maintained the policy stance in April 2015 Index (2–5 Apr 2012 Average =100) In April 2015, MAS kept the S$NEER policy band on a modest and gradual appreciation MAS maintained the modest and gradual appreciation path of the S$NEER policy band in path, with no change to the slope, width and April 2015. level at which it was centred. This policy 106 Appreciation stance was assessed to be consistent with the 104 benign inflation outlook and moderate growth prospects in 2015, as well as 102 appropriate for ensuring medium-term price 100 stability in the economy. Depreciation 98 Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr The Singapore economy is on track to grow 2015 2012 2013 2014 at a modest pace in 2015. Global growth indicates release of Monetary Policy Statement prospects remain uneven, with the recovery in the G3 providing some support to Singapore’s external-oriented sectors. However, the latter’s expansion could be capped by ongoing reconfigurations in the electronics industry. In comparison, the domestic-oriented sectors, especially those with firm underlying demand, such as healthcare and education, should stay broadly resilient. In August 2015, the Ministry of Trade & Industry narrowed the GDP growth forecast for the full year to 2–2.5%. Inflationary pressures are expected to be muted in the near term. MAS Core Inflation is expected to remain subdued as external price pressures should be contained due to favourable supply conditions in key commodity markets. CPI-All Items inflation could ease further, given the dampening effects of car prices and imputed rentals on owner-occupied accommodation amid the anticipated increase in the supply of COEs and newly-completed housing units respectively. MAS Core Inflation and CPI-All Items inflation could rise towards the end of the year and are expected to pick up further in 2016, as the effects of the budgetary measures and the drag from the earlier fall in global oil prices dissipate on a year-ago basis. For 2015 as a whole, MAS Core Inflation and CPI-All Items inflation are projected to come in at the lower half of the forecast ranges of 0.5–1.5% and −0.5–0.5% respectively. However, given the supply constraints in the labour market, underlying cost pressures risk mounting and passing through more strongly to consumer prices over the medium term. In August 2015, MAS reaffirmed the monetary policy stance that was announced in April 2015. Amid the global foreign exchange market volatility following the shift in China’s Monetary Authority of Singapore 15 Economic Policy Group exchange rate policy, MAS reiterated that the domestic monetary policy stance remained appropriate from the perspective of overall macroeconomic conditions.8 Fiscal Policy: The FY2015 Budget focused on laying the foundations for future growth and strengthening social security The FY2014 Budget outcome was a smaller deficit of $0.1 billion (0.0% of GDP), compared to the $1.2 billion shortfall projected earlier. This was mainly due to higher-than-expected revenue from motor vehicle taxes, vehicle quota premiums and corporate income tax, which more than offset a slightly larger expenditure outturn on manpower. Budget 2015 was centred on building Singapore’s future in four major areas. First, it focused on developing human capital. Details of the SkillsFuture initiative were unveiled, encompassing credits for work skills-related courses, awards to develop mastery in specialist skills in identified growth clusters, training support for mid-career workers, and stronger industry collaboration, among other measures. The wide range of measures would help Singaporeans develop deep skills and expertise, with the government playing the role of an active enabler. Second, the Budget aimed to entrench the impact of past restructuring initiatives by expanding on previous measures to boost innovation and internationalisation. Financial support to encourage firms to innovate and venture abroad was increased. Budget 2015 also introduced concessionary tax rates for internationalising firms, and piloted a new risksharing scheme to provide young and fast-growing companies with alternative financing options. To give businesses more time to adjust to rising costs as they restructure, the Transition Support Package, which was due to lapse in 2015, would instead be phased out gradually—the Wage Credit Scheme and Corporate Income Tax Rebate were extended, although the Productivity and Innovation Credit Bonus was allowed to expire. There was also a deferment in the previously announced foreign worker levy increases, to help firms gradually adapt to a permanently tight labour market. Third, major infrastructural investments were committed to meet Singapore’s future economic and social needs. These included the development of Changi Airport’s new terminal T5, improvements in housing estates and the public transport system, as well as the expansion in the capacity of hospitals and nursing homes. Fourth, Budget 2015 made further strides in strengthening social security for lower- and middle-income Singaporeans. Building on existing measures in our social security framework, such as Workfare and enhanced medical subsidies for the elderly, this Budget introduced the Silver Support Scheme, which provides an income supplement for the bottom 20–30% of Singaporeans aged 65 and above based on their lifetime income, extent 8 Please refer to the 12 August 2015 MAS media release “Singapore Dollar Remains Within Policy Band in Face of Market Volatility” at http://www.mas.gov.sg/News-and-Publications/Media-Releases/2015/MAS-Singapore-Dollar-Remains-WithinPolicy-Band-in-Face-of-Market-Volatility.aspx Monetary Authority of Singapore 16 Economic Policy Group of family support, and housing type. The Budget also aimed to enhance CPF savings by raising the salary ceiling to benefit middle-income workers, and increasing CPF contribution rates as well as interest rates earned on CPF balances for Singaporeans aged 55 and above. In order to meet increased government spending over the medium term, Budget 2015 introduced two measures to strengthen the revenue base. The first was the proposal to allow the government to spend up to 50% of the expected long-term real returns on its net assets managed by Temasek, on top of that by MAS and GIC. Second, personal income tax rates were raised by 1–2% points for the top 5% of income earners. This also had the effect of making the tax regime more progressive and thus more equitable. For FY2015, the government has projected an overall budget deficit of $6.7 billion (1.7% of GDP). This includes special transfers, top-ups to trust and endowment funds, and revenue from net investment returns. The basic balance, which includes special transfers only (excluding top-ups to endowment and trust funds), is projected to record a deficit of $9.6 billion (2.4% of GDP). Monetary Authority of Singapore 17 Economic Policy Group Summary of Fiscal Position FY 2013 FY 2014 Revised FY 2015 Budgeted $billion % of GDP $billion % of GDP $billion % of GDP Operating Revenue 57.0 14.9 61.3 15.7 64.3 16.0 Total Expenditure 51.7 13.5 57.2 14.6 68.2 17.0 Operating Expenditure 39.7 10.4 43.3 11.1 48.7 12.1 Development Expenditure 12.0 3.1 13.9 3.5 19.5 4.8 Primary Surplus/Deficit (-) 5.3 1.4 4.2 1.1 (3.9) (1.0) Less: Special Transfers Excluding Top-ups to Endowment and Trust Funds 3.0 0.8 4.3 1.1 5.7 1.4 Basic Surplus/Deficit (-) 2.3 0.6 (0.2) (0.0) (9.6) (2.4) Less: Top-ups to Endowment and Trust Funds 5.6 1.5 8.5 2.2 6.0 1.5 Add: NIR Contribution 8.3 2.2 8.6 2.2 8.9 2.2 Budget Surplus/Deficit (-) 5.0 1.3 (0.1) (0.0) (6.7) (1.7) Note: Figures may not tally due to rounding. Source: Ministry of Finance ____________________________ Note: Labour market statistics were obtained from the Ministry of Manpower, while trade and index of industrial production (IIP) data were provided by IE Singapore and EDB respectively. All other data in this document were obtained from the Building and Construction Authority, Department of Statistics, or Ministry of Trade and Industry, unless otherwise stated. Monetary Authority of Singapore 18 Economic Policy Group Selected Indicators GENERAL INDICATORS, 2014 Land Area (Sq km) 718.3 Li teracy Rate* (%) Tota l Popul ati on ('000) 5,469.7 Real Per Capi ta GDP (US$) Labour Force ('000) 3,530.8 Gross Nati onal Sa vi ngs (% of GNI) Resi dent Labour Force Pa rti ci pa ti on Rate (%) 96.7 54,915 48.2 67.0 * Refers to resident population aged 15 years and over. COMPONENTS OF NOMINAL GDP SECTORAL (% of GDP), 2014 COMPONENTS OF NOMINAL GDP EXPENDITURE (% of GDP), 2014 Manufacturi ng 18.4 Pri vate Cons umpti on 37.2 Whol esa l e & Retai l Trade 17.5 Publ i c Cons umpti on 10.1 Busi nes s Servi ces 15.8 Pri vate Gross Fi xed Capi tal Forma ti on 20.8 Fi na nce & Insurance 12.5 Publ i c Gross Fi xed Capi tal Forma ti on 4.9 6.9 Increas e i n Stocks 2.3 Cons tructi on 5.1 Net Exports of Goods & Servi ces Informati on & Communi ca ti ons 4.0 Accommodati on & Food Servi ces 2.2 Transporta ti on & Storage MAJOR EXPORT DESTINATIONS (% SHARE), 2014 Tota l Exports (S$ Bi l l i on) 24.7 MAJOR ORIGINS OF IMPORTS (% SHARE), 2014 518.9 Total Imports (S$ Bi l l i on) 463.8 Chi na 12.6 Chi na 12.1 Ma l ays i a 12.0 Mal ays i a 10.7 Hong Kong 11.0 US 10.3 Indonesi a 9.4 Ta i wan 8.2 US 5.6 South Korea 5.9 ASEAN 31.2 ASEAN 20.6 NEA-3 19.0 NEA-3 15.0 EU 11.7 EU 7.8 Source: IE Singapore MAJOR DOMESTIC EXPORTS BY COMMODITY (% SHARE), 2014 Domes ti c Exports (S$ Bi l l i on) MAJOR IMPORTS BY COMMODITY (% SHARE), 2014 273.5 Total Imports (S$ Bi l l i on) 463.8 Mi nera l Fuel s 39.1 Mi neral Fuel s 31.0 Chemi cal s 18.1 El ectroni cs 25.6 El ectroni cs 17.6 Machi nery & Trans port Equi pment (ex. El ectroni cs ) 15.8 Ma chi nery & Tra ns port Equi pment (ex. El ectroni cs ) 9.3 Manufactured Arti cl es 7.6 Ma nufactured Arti cl es 9.2 Chemi cal s 7.1 Ma nufactured Goods 2.4 Manufactured Goods 6.9 Source: IE Singapore Monetary Authority of Singapore 19 Economic Policy Group OVERALL ECONOMY GDP at current prices (S$ bil) GDP (US$ bil) Real GDP Growth (YOY % change) Real GDP Growth (QOQ SAAR % change) By Sector (YOY % change): 1/ Manufacturing 1/ Electronics 1/ Non-electronics Finance & Insurance Business Services Construction Transportation & Storage Information & Communications Wholesale & Retail Trade Accommodation & Food Services By Expenditure Component (YOY % change): Consumption Private Public Gross Fixed Capital Formation Private Public External Demand TRADE Total Exports, fob (YOY % change) Non-Oil Domestic Exports Re-Exports Total Imports, cif (YOY % change) WAGE-PRICE INDICATORS Unemployment Rate (SA,%) Average Nominal Wages (S$ per month) Consumer Price Index Inflation (YOY % change) MAS Core Inflation (YOY % change) 2013 378.2 302.2 4.4 na 2014 390.1 307.9 2.9 na 2014 Q1 96.4 75.9 4.6 1.8 2014 Q2 96.8 77.3 2.3 -0.5 2014 Q3 97.4 77.8 2.8 2.6 2014 Q4 99.5 76.9 2.1 4.9 2015 Q1 99.1 73.1 2.8 4.1 2015 Q2 98.5 73.3 1.8 -4.0 Jun-15 na na na na Jul-15 na na na na 1.7 3.5 0.9 12.2 4.9 6.3 3.5 7.6 6.7 3.3 2.6 -0.2 3.9 7.7 2.9 3.0 1.7 3.6 1.7 1.1 9.6 9.1 9.8 5.4 3.9 7.4 5.4 2.8 2.7 2.0 1.3 -5.8 4.4 5.1 2.2 3.0 2.0 3.2 1.6 0.1 1.7 0.0 2.4 9.9 2.6 1.1 0.1 4.0 2.1 1.0 -1.3 -2.8 -0.4 10.3 2.9 0.7 -0.4 4.4 0.6 1.3 -2.4 -3.6 -2.2 7.8 3.2 1.1 1.4 4.9 5.3 -0.1 -4.9 0.3 -6.9 7.1 2.0 2.5 -0.9 4.5 5.0 -0.6 -4.0 -1.8 -4.8 na na na na na na na -6.1 -5.8 -6.3 na na na na na na na 5.2 3.6 11.5 1.1 1.2 0.7 4.5 2.0 2.5 0.1 -1.9 -4.5 10.4 2.1 -0.6 2.8 -9.8 -0.7 -4.1 13.4 6.9 4.9 3.1 13.6 -2.4 -5.1 11.6 2.0 1.5 1.9 -0.2 -5.6 -8.5 9.5 -0.3 2.4 2.2 3.3 1.2 -0.1 7.3 0.2 3.6 3.3 4.6 -1.0 0.2 -5.0 3.9 3.0 3.8 -0.4 4.1 2.3 12.3 0.6 na na na na na na na na na na na na na na 0.6 -6.0 6.2 -1.6 1.1 -0.7 2.6 -0.6 7.4 -1.0 12.5 6.8 2.7 -3.4 2.3 3.0 -1.4 1.1 -2.3 -5.7 -3.8 0.5 -0.6 -6.0 -5.4 4.8 1.5 -16.1 -8.6 2.1 -5.2 -13.0 -6.2 4.5 -4.7 -4.5 -4.0 -0.8 1.6 -9.2 1.9 4,622 2.4 1.7 2.0 4,727 1.0 1.9 2.0 5,108 1.0 2.0 2.0 4,445 2.2 2.2 1.9 4,314 1.0 2.0 1.9 5,040 0.0 1.6 1.8 5,259 -0.3 1.1 2.0 4,611 -0.4 0.2 na na -0.3 0.2 na na -0.4 0.4 1.2653 1.2061 1.7452 1.3213 1.1060 1.6072 1.2605 1.2252 1.7328 1.2490 1.2326 1.7041 1.2728 1.1643 1.6157 1.3213 1.1060 1.6072 1.3765 1.1447 1.4876 1.3474 1.1014 1.5080 1.3474 1.1014 1.5080 1.3728 1.1077 1.5028 0.14 0.40 5.38 0.14 0.46 5.35 0.15 0.41 5.35 0.14 0.40 5.35 0.14 0.41 5.35 0.14 0.46 5.35 0.17 1.01 5.35 0.16 0.82 5.35 0.16 0.82 5.35 0.16 0.88 5.35 4.3 3,167.4 0.0 3.3 3,365.2 6.2 2.0 3,188.6 -3.6 0.6 3,255.7 3.3 1.9 3,276.7 3.4 3.3 3,365.2 6.2 3.9 3,447.0 8.1 3.5 3,317.3 1.9 3.5 3,317.3 1.9 2.6 3,202.5 -5.1 57,054 52,329 40,390 11,939 4,725 1.2 59,995 54,805 41,758 13,047 5,190 1.3 13,498 16,722 13,033 3,689 -3,224 -3.3 15,868 10,920 7,698 3,222 4,948 5.1 16,595 12,950 9,702 3,248 3,645 3.7 14,034 14,214 11,326 2,888 -179 -0.2 14,340 18,565 13,960 4,605 -4,224 -4.3 16,857 12,127 7,988 4,140 4,730 4.8 na na na na na na na na na na na na 17.9 24.6 -1.4 -3.1 -2.3 -11.9 11.9 -21.8 4.4 -6.4 6.0 273,065 8.8 19.1 24.8 -0.4 -3.0 -2.3 -16.1 8.7 -17.2 4.0 -11.7 2.2 256,860 8.4 16.2 21.8 0.0 -3.2 -2.4 -14.5 7.7 -27.6 2.9 2.5 0.5 272,941 8.7 18.4 25.5 -1.4 -3.3 -2.3 -12.4 8.4 -37.4 3.1 13.4 4.8 277,967 8.8 22.4 26.6 0.5 -2.3 -2.3 -19.8 5.6 -4.9 3.7 -24.3 3.5 266,142 8.5 19.2 25.3 -0.6 -3.1 -2.3 -17.6 13.1 0.5 6.2 -37.5 0.1 256,860 8.4 27.4 31.8 0.4 -2.4 -2.4 -30.8 9.2 -17.3 5.0 -27.7 -1.3 248,404 8.6 23.4 27.7 0.5 -2.4 -2.4 -19.3 6.7 -12.6 7.4 -20.8 2.7 253,280 9.3 na na na na na na na na na na na 253,280 9.3 na na na na na na na na na na na 250,116 9.3 2/ FINANCIAL INDICATORS S$ Exchange Rate Against: (end-period) US Dollar 100 Japanese Yen Euro Interest Rates (end-period, % p.a.) 3-month Fixed Deposit Rate 3-month S$ SIBOR Prime Lending Rate Money Supply (end-period) Broad Money, M2 (YOY % change) Straits Times Index (end-period) YOY % change 3/ GOVERNMENT BUDGET Operating Revenue (S$ mil) Total Expenditure (S$ mil) Operating Expenditure Development Expenditure Primary Surplus/Deficit (S$ mil) % of GDP BALANCE OF PAYMENTS Current Account Balance (% of GDP) Goods Balance Services Balance Primary Income Balance Secondary Income Balance Capital & Fin Account Balance (% of GDP) Direct Investment Portfolio Investment Financial Derivatives Other Investment Overall Balance (% of GDP) 4/ Official Foreign Reserves (US$ mil) Months of Imports Source: 1/ Index of Industrial Production from EDB. 2/ 3/ 4/ Straits Times Index from SGX. All other indicators from MAS. Ministry of Finance MAS na : Not a va i l a bl e Monetary Authority of Singapore 20 Economic Policy Group