Singapore’s economy grew by 5.1 per cent in the first quarter of 2014 from a year ago due to an improvement in manufacturing, with moderate economic growth expected with a projected expansion of 2–4 per cent in 2014.
Singapore’s economy grew by 5.1 per cent in the first quarter of 2014 from a year ago as an improvement in manufacturing offset a slowdown in services, the Ministry of Trade and Industry said on Monday.
As for inflation, the Monetary Authority of Singapore said in a separate news release that it’s expected to pick up in the coming months as firms continue to pass on accumulated cost increases to consumer prices, but it should ease in the second half of 2014.
It added that it will maintain its policy of a modest and gradual appreciation of the S$NEER policy band.
According to the latest advance estimates released by the Ministry of Trade and Industry, Singapore’s GDP rose by a modest 0.1 per cent in Q1 2014 on a quarter-on-quarter seasonally adjusted annualised basis, following the 6.1 per cent expansion in Q4.
The 5.1 per cent growth rate was, however, lower than the median expansion of 5.4 per cent forecast by economists and below the 5.5 per cent growth achieved in the previous quarter.
Economists said the advance estimate of 5.1 per cent is a conservative one and likely to be revised upwards.
Senior Economist of DBS Bank, Irvin Seah, said: “You got to take the set of figures with a pinch of salt, because the recent track record for the advance estimate number hasn’t been that good. For example, last year, in three out of four quarters, the advance estimate totally missed the mark, in the sense that, you know, the advance estimate shows that the economy is heading one directions, and then when the final figure came out, you know, it was the other direction.”
On a year-on-year basis, the manufacturing sector grew by 8.0 per cent, following the 7.0 per cent expansion in the previous quarter.
The faster pace of expansion was largely due to a sharp rebound in biomedical manufacturing output and stronger growth in chemicals output.
Services grew by 4.7 per cent on a year-on-year basis in the first quarter, lower than the 5.9 per cent growth in the previous quarter.
The moderation in growth was largely due to slower expansion in the wholesale & retail trade and finance & insurance sectors.
Economists said it is hard to quantify exactly by how much, but the manpower crunch faced by the services sector could be a reason why its growth has been constrained.
Curbs on foreign worker growth have added more to the challenges faced by several sectors.
Edward Lee, Regional Head of Research – Southeast Asia, Standard Chartered Bank, said: “Possibly, you can say foreign labour force adds about one to 1.5 percentage points to growth over the last 10 years or so. But it’s really hard to be precise. This is sort of average growth. But we do know on anecdotal evidence that businesses, especially the smaller and medium enterprise companies, do complain about their inability to find workers.”
On a quarter-on-quarter seasonally-adjusted annualised basis, the economy grew by 0.1 per cent — moderating from the 6.1 per cent expansion in the preceding quarter — as services contracted.
According to the MAS, the Singapore economy is projected to expand 2–4 per cent in 2014, although the growth profile could be uneven.
“The Singapore economy is expected to grow at a moderate pace in 2014,supported by the cyclical uplift in the industrialised economies.
“Notwithstanding the weak growth outturn in Q1, the level of economic activity should stay on a broad upward trajectory for the rest of the year” said the MAS in a statement.
It went on to say that the outlook for the global economy has brightened, especially with the US recovery in the labour market expected to continue, lending support to consumer spending and the Eurozone forecast to emerge from two consecutive years of economic contraction.
Against this backdrop, the MAS said Singapore’s trade-related sectors should grow at a moderate pace.
Domestic-oriented activities are expected to stay resilient, supported by construction of transportation, housing and social infrastructure.
Overall growth, it cautioned will be capped by supply constraints, particularly in the labour market.
Source : Channel News Asia | April 14, 2014
Global commerce is set to grow by 4.7 per cent this year, the World Trade Organization (WTO) said on Monday, with recovery in rich economies expected to mitigate risks in developing nations.
The WTO previously had forecast that trade would expand by 4.5 per cent in 2014, up from an estimated rate of 2.1 per cent in 2013.
So the latest forecast points to substantially more than a doubling of the growth achieved last year.
Trade is a key measure of the health of the global economy which it both stimulates and reflects.
Asia will continue to fuel growth rates, the WTO said, although China’s exceptionally strong expansion is slowing.
In addition, Europe and North America’s recovery is also set to be a key driver on both the import and export fronts.
“For the last two years trade growth has been sluggish. Looking ahead, if GDP (gross domestic product) forecasts hold true, we expect a broad-based but modest upturn in 2014, and further consolidation of this growth in 2015,” WTO chief Roberto Azevedo told reporters.
The WTO predicted that trade growth would pick up pace next year, reaching 5.3 per cent.
“Prospects for world trade and output in 2014 and 2015 are better than they have been for some time, but leading economies remain fragile, including some of the most dynamic developing countries that until recently were propping up demand,” the WTO said in a statement.
“Downside risks to trade abound, but significant upside potential also exists, as the US economy seems to be gaining momentum and the European Union appears to have turned a corner,” it said.
“At the same time, developing economies have slowed appreciably, for a variety of reasons both internal and external. Which of these forces is stronger may determine how world trade evolves over the next one to two years”.
WTO economists noted that a growth rate of 5.3 per cent in 2015 would bring trade growth back to its 20-year average.
For the past two years, growth has averaged only 2.2 per cent.
WTO economists said that the 2014 forecast was based on an assumption that global GDP would expand by 3.0 per cent.
“Risks to the trade forecast are still mostly on the downside, but there is some upside potential, particularly since trade in developed economies is starting from such a low base,” the WTO said.
“However, volatility is likely to be a defining feature of 2014 as monetary policy in developed economies becomes less accommodative,” it said.
The WTO said that risks had receded in Europe thanks to an easing of the eurozone crisis, and in the United States owing to the easing of brinksmanship over budget limits and tax policy between the Obama administration and the Republicans which led to last year’s government shutdown.
Concerns in developing economies include large current account deficits in countries such as India and Turkey, currency crises in some countries including Argentina, over-investment in productive capacity, and rebalancing economies to rely more on domestic consumption and less on exports.
The WTO also pointed to geopolitical risks, notably conflicts in the Middle East, Asia and Ukraine, which it said could provoke higher energy prices and disrupt trade flows if they escalate.
The 158 economies which make up the WTO set trade rules among themselves in an attempt to ensure a level playing field and spur growth by opening markets and removing trade barriers, including subsidies, excessive taxes and regulations.
Created in 1995, the WTO launched its Doha Round of trade liberalisation talks in 2001 with the stated aim of underpinning development in poorer nations.
The talks repeatedly faltered in the face of obstacles set in particular by China, the EU, India and the United States, but negotiators last December struck a partial deal to cut trade costs by slashing red tape in customs services.
Azevedo urged governments to build on that modest breakthrough.
“It’s clear that trade is going to improve as the world economy improves. But I know that just waiting for an automatic increase in trade will not be enough for WTO members,” he said.
Source : Channel News Asia | April 14, 2014
Eye care pharmaceutical firm Alcon has moved into its new S$200 million manufacturing plant in Tuas Biomedical Park in Singapore.
The move will help the firm boost its capacity to meet the growing eye care needs in Asia.
The new 330,000 square foot plant will manufacture products for patients with dry eyes, glaucoma, allergies and bacterial infections in the eye.
US-based Alcon is the second largest division of the Novartis Group.
This is Novartis’ third manufacturing plant and Alcon’s second facility in Singapore.
In 2005, Alcon opened a contact lens manufacturing facility in the Tuas Biomedical Park.
Country President for Novartis Singapore and Head of Group Country Management, Christopher Snook, said: “Singapore’s robust biomedical presence, and the highly skilled and knowledgeable workforce made it easy to choose Singapore for our new site.”
“Asia is a very fast growth market and region for us and it is right therefore that we produce products nearby where our customer base is. That’s why this facility, our third factory in Singapore, is a specialist eye care facility and this is on top of the other facilities, pharmaceutical manufacturing and contact lens factories that we have in Singapore already,” he added.
Source : Channel News Asia | April 14, 2014
Foreign Affairs and Law Minister K Shanmugam has urged Singapore businesses to go for quality growth to tackle the challenge of growing manpower constraints.
Speaking at the Deloitte’s Global Tax Conference on Wednesday, he said it is not viable for Singapore to keep increasing manpower at the same rate as in recent years.
Mr Shanmugam said: “The individual perspective assumes you can keep growing with more and more input of labour, without any constraints on land.
“We have to take the hard position and say that we accept that we have to cut back on the factor of input of labour, because it’s not sustainable to keep growing at this rate. We have to try and go for quality growth.
“That’s a nice catch phrase but for a lot of people, without additional labour, quality growth would not be possible. But these are the trade-offs we have had to make.”
He also addressed questions about Singapore being seen as a ‘tax haven’, especially for tax evasion.
Mr Shanmugam said Singapore has a fundamentally clean system, with robust safety mechanisms to protect against money laundering.
Banks are also required to get to know clients and their sources of funds.
Mr Shanmugam also expressed his bullish outlook on regional integration efforts through the ASEAN Economic Community.
He said that significant diversity within the grouping may pose challenges in the near-to-medium term.
However, he believes the economic potential for integration is substantial.
Mr Shanmugam said: “600 million people in a geographically defined area, sitting between three large economies — India, China and Japan — second largest, third largest, and India among the top 10 economies in the world.
“So you actually have four major blocs — India, ASEAN, China, Japan — huge potential. And if you integrate Australia, which is another G20 country, also $2 trillion, we’re talking about very substantial synergies, which is why ideas like the TPP (Trans-Pacific Partnership) make a lot of sense.”
Source : Channel News Asia | April 9, 2014
Iskandar Malaysia has attracted investments worth a combined 133 billion ringgit (S$51 billion) as of January this year, some eight years after it was established.
According to the Iskandar Regional Development Authority (IRDA), a statutory body tasked with driving development in the region, 35 per cent of that investment is from foreign countries, of which Singapore accounts for 24 per cent.
About three years ago, Singapore manufacturer HPH Technologies expanded into Iskandar Malaysia to address the issues of space constraint and labour shortage in Singapore.
The company manufactures components to support security-related and semiconductor equipment industries.
It currently has two factories in the economic zone, set up at a cost of S$15 million.
HPH said it has seen business revenue double since its expansion there and reaped 30 per cent savings in labour cost.
The company hires about 130 workers in total, of which 70 are located in Iskandar Malaysia. It also plans to boost its headcount by some 30 per cent by the end of the year.
Its managing director, Lim Hak Poh, welcomed the recent announcement that Singapore will help Malaysia upgrade its vocational training.
He said: “The problem here is (skilled) manpower and our industry needs skilled manpower.
“If we can reach out to the secondary schools across Malaysia, offer them (students) training and apprenticeship, and… bring them to the Singapore companies operating in Iskandar, that would encourage a lot of Singapore companies to move here.”
As of January this year, nearly 47 billion ringgit — about 35 per cent of total investments in Iskandar Malaysia — is from foreign countries.
“Singapore has been for a while now the largest source of investments in Iskandar Malaysia — 11 billion ringgit or S$4.2 billion — primarily in areas of broad manufacturing sectors, education, healthcare as well as property,” said Ismail Ibrahim, chief executive of IRDA.
Mr Ismail said manufacturing forms the backbone of Iskandar Malaysia and the state of Johor’s economy.
He added that development plans will focus on sectors like electronics, petrochemical and food processing. IRDA said the manufacturing sector received 47.8 billion ringgit worth of investments as of January 2014.
“We would like to see… the manufacturing sector (continue) to be in the higher level of the manufacturing value chain, and we want world-class manufacturing,” said Mr Ismail.
“We are actually targeting the technology-intensive kind of manufacturing facilities that are not totally dependent on low-cost labour industries.”
Apart from the manufacturing sector, Mr Ismail said Singapore and Iskandar Malaysia can also work together in areas including environmental management, and arts and culture.
Source : Channel News Asia | April 9, 2014
Despite growing challenges from other attractive medical hub countries in recent years, Thailand has retained its premium status as the world’s premier medical tourism hub. Bumrungrad International Hospital is one such institution. Find out how it continues to draw international patients in this report.
Bumrungrad International Hospital, operated since 1989, is the largest private hospital in Southeast Asia. Located in the heart of Bangkok, the hospital serves over a million patients annually. Over 520,000 are international patients, including thousands of expatriates who live in Bangkok and nearby countries, plus visitors from some 190 countries around the world.
The reason the hospital opted to open its services for international patients goes back to the 1997 Asian economic crisis, which resulted in a very weak local economy. The hospital had targeted a premium market, in which during that period, and even wealthy Thais were hit by the crisis. However, the hospital was surprised by the rising number of international patients, most of them coming by word of mouth.
“I think a word of mouth gets out. At first they came as tourists, then they might have some accidents and they came to hospital. They were surprised to have this kind of medical service. When they go back home, they tell their friends and maybe there are some direct flights. So people start saying this is very interesting,” said Kenneth Mays, Bumrungrad Hospital marketing director.
As the hospital’s reputation on medical tourism hub became established, it has opened international representative offices in Australia, Bahrain, Bangladesh, Cambodia, Ethiopia, Hong Kong, Indonesia, Mongolia, Myanmar, Nepal and Vietnam to facilitate their clients’ medical journeys.
“A lot of these countries, the economies are growing but the medical infrastructure lags behind. It takes 20 years to get a good doctor and good medical infrastructure. So in the interim, they can use Thailand for their serious concerns.”, said the hospital marketing director.
But Thailand is not the only country which positions itself as a medical tourism hub. Hospital Marketing Director Kenneth Mays said Singapore and India have always been rivals, with newcomers like Malaysia, Turkey, South Korea and Costa Rica. But he believes Thailand will remain the top player in the industry and benefit from the integration of the ASEAN Economic Community.
“Thailand has a competitive advantage in the world for medical treatment. ASEAN has Thailand as a leader in medical tourism, as well as Malaysia and Singapore. So I think ASEAN can promote a region as medical destination and then we have countries within ASEAN like Indonesia where a lot of people need a lot of medical treatment outside their country. We can make it easier for people to cross border and make patients come here to Thailand,” said Kenneth Mays
Source : MCOT | February 14, 2014
Japan and Australia on Monday said they had reached “substantive agreement” on a long-awaited free-trade deal, in a rare opening of Japan’s protected markets, even as talks to ink a huge Asia-Pacific agreement run into trouble.
The deal was announced as Japanese Prime Minister Shinzo Abe and visiting Australian Prime Minister Tony Abbott held a briefing in Tokyo Monday evening.
It “will create significant new trade and investment opportunities for the two countries”, a press statement said, adding that a final deal would be signed “as early as possible”.
Speaking to reporters, Abbott said the deal marked “truly an historic occasion for both of our countries”, with the pair also agreeing to boost cooperation in security, including joint development of defence equipment.
On Tuesday, Canberra is set to sign a free trade pact with Seoul after four years of negotiations. Abbott will head to China after South Korea as part of an East Asian tour.
Under Abe, Tokyo has entered into talks on the massive Trans-Pacific Partnership (TPP), a proposed free-trade deal that would encompass 12 nations including the United States and Japan.
But there are major sticking points among various nations, including the opening of protected domestic markets such as agriculture and automobiles.
Japan has long been accused of protecting its domestic industries — including the politically powerful agricultural sector — with high trade and other non-tariff barriers, while many of its own exports, including vehicles and electronics, enjoy big sales overseas.
The US has expressed frustration with Japan over its stance on keeping certain sectors out of the TPP, as talks continue.
Tokyo is also in separate free-trade negotiations with the European Union.
Australia would become the first major exporter of farm produce, including beef, to conclude a free-trade accord with Japan, Kyodo news agency said, with a deal expected to give Australian exports a significant competitive edge over US rivals.
There were few details about the trade deal announced Monday.
Japanese media have reported that Australia would drop its five percent duty on small and mid-sized Japanese cars while Tokyo was ready to lower its tariff on Australian beef, currently sitting at 38.5 per cent.
The agreement to boost security cooperation come as Japan last week loosened a self-imposed ban on weapons exports to boost Tokyo’s global role in a move which unnerved neighbouring China.
“We decided to start talks towards an agreement on a co-operative framework in the areas of defence equipment and technology,” Abe said Monday evening.
The Australian premier attended a national security council meeting in Tokyo earlier in the day, a first for a foreign leader, as he called for peace in the region.
“This will be the Asian century,” Abbott said.
“I think that’s true: The better Asia is, the better the world will be,” he added.
Regional tensions have soared as China and Japan lock horns over the ownership of a string of islands in the East China Sea, while Beijing is also embroiled in a dispute with several nations over territory in the South China Sea, which it claims almost in its entirety.
An unpredictable North Korea hangs over the regional power balance.
Abbott’s visit came as Tokyo said last week it would cancel its annual Antarctic whaling hunt for the first time in more than 25 years to abide by a UN court ruling that the scheme was a commercial activity disguised as science.
Australia, backed by New Zealand, hauled Japan before the International Court of Justice in 2010 in a bid to end the annual Southern Ocean hunt — a thorny diplomatic spat that threatened to damage the trade talks.
The deal with South Korea, meanwhile, calls for Canberra and Seoul to remove almost all tariffs on traded goods within 10 years of the agreement going into effect.
Australia will abolish a five per cent import tariff on most South Korean-made cars while a five per cent tariff on other South Korean exports such as TVs, refrigerators and machinery would also be eliminated immediately.
Tariffs will also go on resources, energy and manufactured goods, while the deal will open the door to new opportunities for Australian firms in South Korea’s education and telecommunications markets.
Source : Channel News Asia | April 7, 2014