Singapore Jobless Rate at 1-year High, seen rising...

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SIGH....

Reuters - Thursday, July 31

SINGAPORE, July 31 - Singapore's jobless rate rose to a one-year high as firms slowed hiring amid choppy financial markets and a weakening global economy, and analysts warned that unemployment may climb in coming months.

The jobless rate rose to 2.3 percent in the April-June period after seasonal adjustments, compared to 2 percent in the previous quarter, the Ministry of Manpower said in preliminary data on Thursday.

Employment rose by 70,600 in the second quarter, slowing from a rise of 73,200 in the January-March period.

Economists said the rising jobless rate was evidence that the economic slowdown had extended beyond economic data and was spreading into the real economy, although Singapore's labour market is still expected to remain tight this year.

"The labour market is going to soften as growth...slows," said Irvin Seah, an economist at DBS. "We don't expect a sharp rise in retrenchments but things are going to move along at a slower pace."

Economists said the tight labour market -- the unemployment rate was at a 10-year low in the fourth quarter -- may fuel price pressures in Singapore where inflation is at a 26-year high.

"The labour market is still tight but it is moving towards a more sustainable pace that will soften the margin squeeze on companies," Seah said.

The booming construction industry created a record 22,100 jobs in the second quarter, compared to 14,500 in the first three months of the year, as building deals carried over from last year's red-hot property market -- which has since cooled -- continued to fuel activity.

Services, which includes the key financial sector, added 37,600 jobs in the April-June period, slowing from the first quarter when 46,500 jobs were created.

Employment in manufacturing rose by 10,200, down from an increase of 11,800 in the first quarter.

Retrenchments in Singapore fell to 1,900 in the second quarter from 2,274 in the previous quarter.

Heng Swee Keat, Singapore's central bank chief, said this month unemployment rate is seen at 2 percent for 2008.

Economies across Asia are expected to slow this year as growth in the key U.S. and Europe export markets weaken, while demand in emerging markets are not as strong as hoped.

Singapore's trade-driven economy, a barometer for global demand for Asian exports, shrank an annualised and seasonally adjusted 6.6 percent in the second quarter, its biggest contraction in five years.

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Folks, watch out for another 'Financial Crisis' soon.

NTUC chief concerned global economy heading towards stagflation

Channel NewsAsia - Saturday, August 2

SINGAPORE: Labour chief Lim Swee Say has urged workers to work together to cope with a global economy which may be heading towards a state of stagflation — one sparked off by low growth and high inflation.

The NTUC secretary general made the call in his National Day message.

Singapore’s National Day is being celebrated amidst concerns about the slowing global economy and rising inflation, said Mr Lim.

And to tackle these concerns, the labour movement, the employers and the government are addressing two core priorities.

First, coping with the impact of inflation without being caught in a price—wage spiral.

"The worse thing that any country does at a time of high inflation would be for the unions and workers to push for wage inflation. Wage inflation is different from wage increment. Wage inflation means you are pushing up wages to fully offset the inflation," said the labour chief.

He added that companies in the unionised sector are currently in talks on their annual increment.

One key consideration that is being taken into account in these negotiations is the current state of inflation.

The labour movement noted that private sector companies in the unionised sector have been giving a higher percentage of built—in wage increases in the first half of this year compared to last year, with the figure in the range of 4.4 per cent against 3.8 percent in 2007.

— CNA/ir

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Singapore cuts 2008 GDP growth forecast to 4%—5%

Channel NewsAsia - Saturday, August 9

SINGAPORE: Singapore Prime Minister Lee Hsien Loong, in his National Day message, has cut the 2008 GDP growth forecast to between 4 per cent and 5 per cent from an earlier estimate of between 4 per cent and 6 per cent.

He also said the country faces a tough year ahead as it is beginning to feel the impact of a US slowdown.

"For the whole year, we expect growth to be between 4 and 5 per cent," Mr Lee said in his annual message, which was televised on the eve of Singapore’s 43rd birthday.

Mr Lee said the Singapore economy had expanded by 4.5 per cent in the first six months of 2008.

"Singapore’s economy has so far been partly buffered, because we’ve been carried along by the vibrancy of the Asian region. But Asian economies are starting to feel the impact of America’s problems, and so are we. We must therefore prepare ourselves for a bumpy year ahead," he said.

Mr Lee acknowledged the problems Singaporeans are facing are due to global inflation. And while the government cannot prevent prices from going up as they are worldwide, it is trying to lighten the burden on Singaporeans through schemes like Workfare and ComCare.

"We are doing the next best thing: to put in place effective relief measures, and provide the poor and the needy with the help they need. We must look beyond immediate problems like the cost of living, to understand what is happening in the world around us, discover new opportunities and tackle our longer—term challenges," he said.

The annual message is seen as a prelude to the National Day Rally, where the Prime Minister goes into further detail on the long—term challenges facing the country.

In the televised message on Friday, Mr Lee highlighted three other points.

First, the upgrading of Singapore’s economy: to do so, there must be investment in its people. One way is through education. To that end, Singapore is building a fourth university which will take its first batch of students in 2011, well ahead of the original target of 2015. The publicly—funded university will have its campus in Changi.

The second point Mr Lee highlighted was how to encourage Singaporeans to have more children to boost the country’s total fertility rate, which currently stands at only 1.29

PM Lee said: "We can create an environment where Singaporeans see them (children) as a natural and important part of life, and where young couples get support in starting families. We have looked at this comprehensively and will take further steps to address the practical problems which couples face."

Mr Lee also spoke of adapting Singapore to be able to educate and engage what he called "cyber—citizens".

He said: "We must adapt ourselves to it, and use it to educate and engage our cyber—citizens. We will evolve our policies and rules, our economy and society, to take full advantage. We will continue to open up our system progressively."

Mr Lee hinted that the country will continue to open up space for political and societal debate, saying it is the "right way to go". But he also said that as the country continues to open up, its new generation of citizens need to understand that all freedoms come with responsibilities.

For the first time, this year’s National Day Message was shot on high—definition video.

Another first — it was filmed at Sri Temasek, located within the Istana grounds in Singapore. The building is the Prime Minister’s official residence, though none of Singapore’s prime ministers has ever lived there.

Viewers of MediaCorp’s HD5 — Singapore’s free—to—air high—definition channel — were able to catch the National Day Message broadcast in true high—definition. Standard definition TV viewers also enjoyed sharper image quality than previously.

There will be a repeat broadcast of the PM’s message on August 9. Details of the broadcast schedule are available here.

The video and the text of the message are available online at channelnewsasia.com

— CNA/ir

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Singapore's economy shrinks in Q2, exports seen down

Reuters - Monday, August 11

By Jan Dahinten and Kevin Lim

SINGAPORE, Aug 11 - Singapore's economy contracted in the second quarter and the government forecasts exports to fall this year for the first time since 2001, a sign that sagging growth is becoming a bigger worry for Asia than inflation.

The government on Monday forecast non-oil domestic exports would fall 2-4 percent in 2008, against an earlier estimate of 2-4 percent growth, and predicted the economy would grow at a lower end of a weaker 4-5 percent forecast.

In the second quarter, the economy contracted at a annualised rate of 6 percent after seasonal adjustments, its worst performance in five years and in line with market expectations. Year-on-year the economy grew 2.1 percent.

(For a graphic of GDP data, click on: https://customers.reuters.com/d/graphics/SG_GDPQ0808.gif)

Singapore's heavy dependence on trade makes the $160 billion economy a good gauge of how the global slowdown is affecting Asia. Non-oil domestic exports to the United States fell 21 percent in the second quarter, while shipments to European Union dropped by 12 percent.

The Singapore dollar, the central bank's main policy tool, slumped to a near six-month low around S$1.41 to the U.S. dollar.

"The balance of risk is shifting away from inflation toward growth as seen from the correction of the Singapore dollar last week," said Kit Wei Zheng, an economist at Citigroup.

NO RECESSION

Like many Asian countries, Singapore has been grappling with inflation even as economic growth slows. But officials suggested on Monday that inflation may have peaked and said -- while not expecting at technical recession -- that there will be no quick turnaround in global growth.

"The macroeconomic dynamics will remain fluid over the next 12 to 18 months. It is too early to tell what 2009 will bring," Ravi Menon, a permanent secretary at the trade ministry, told reporters.

"Current indications are that global economic growth will not see a quick turnaround."

Construction grew 17.4 percent year-on-year and the financial sector grew 10.2 percent in the second quarter, but manufacturing shrank 5.2 percent.

Manufacturing, which accounts for about a quarter of economic activity, is expected to slow, reflecting weak U.S. and European demand.

Given that, economists said it was unlikely that the central bank will further tighten monetary policy at its next meeting in October, barring a spike in oil prices.

"We believe our policy remains appropriate," said Ong Chong Tee, managing director of central bank the Monetary Authority of Singapore.

The central bank steers monetary policy by managing the Singapore dollar's <SGD=> nominal effective exchange rate -- its relative value compared with a basket of currencies of trading partners -- rather than by adjusting interest rates. The trading band and the currencies in the basket are kept secret.

The bank moved the centre of the band up in April, its most aggressive policy change since the 2003 SARS epidemic, to tame inflation that reached a 26-year high in June. (Additional reporting by Saeed Azhar and Charmian Kok, editing by Neil Chatterjee and Tomasz Janowski)

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