Singapore's economy unexpectedly shrank for the first time in a year, contracting at a 10.3 percent annual pace as Asian exporters suffered from a slump in global demand.
Stocks and the city's currency slid as the third-quarter contraction was a reversal from annual growth of 13.2 percent in the second quarter. From the year-earlier quarter, the economy grew 3.7 percent, the Ministry of Trade and Industry said, less than the 6.4 percent median growth forecast in a survey of nine economists by Bloomberg News.
The city's US$84 billion economy is the most dependent in Asia on exports and the first to report figures for the third quarter.
Prime Minister Goh Chok-tong this week said the government may have to cut its forecast for an expansion of between 3 percent and 4 percent this year because of a 10-day closure in US West Coast ports and the threat of a war in Iraq.
"The overall trend for all regional economies is peaking," said Xie Xin, an economist at Bank of America. "Singapore is very likely to go back to recession."
The Straits Times Index fell as much as 1.8 percent to 1,351.86 before recovering to 1,364.38 at 2:35pm Singapore time.
The Singapore dollar traded at S$1.7917, after sliding to as low as S$1.7933 against its U.S. counterpart from a high of S$1.7842.
Singapore may be ``forced to revise'' its full-year growth forecast in a month's time, Prime Minister Goh said at a World Economic Forum meeting in Kuala Lumpur this week. US business and consumer sentiment may falter further if a war in Iraq drags on for more than a few weeks.
"The possibility of the world going into a recession would be real," Goh said.
Singapore is the Asian nation most dependent on exports. The value of its exports of semiconductors, chemicals and other goods exceeds the nation's gross domestic product by more than half. In Hong Kong, exports account for 116 percent of GDP, and in Taiwan they account for nearly half the economy.
Today's report puts the Singaporean economy, which shrank 2 percent in 2001, on the edge of a second recession in two years.
Thanksgiving and Christmas season sales in the US hold the key, said JR Ong, executive director of Singapore-based First Engineering Ltd, which supplies parts to Hewlett-Packard Co and Seagate Technology Inc.
PERSISTENT RUMORS: Nvidia’s CEO said the firm is not in talks to sell AI chips to China, but he would welcome a change in US policy barring the activity Nvidia Corp CEO Jensen Huang (黃仁勳) said his company is not in discussions to sell its Blackwell artificial intelligence (AI) chips to Chinese firms, waving off speculation it is trying to engineer a return to the world’s largest semiconductor market. Huang, who arrived in Taiwan yesterday ahead of meetings with longtime partner Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), took the opportunity to clarify recent comments about the US-China AI race. The Nvidia head caused a stir in an interview this week with the Financial Times, in which he was quoted as saying “China will win” the AI race. Huang yesterday said
Nissan Motor Co has agreed to sell its global headquarters in Yokohama for ￥97 billion (US$630 million) to a group sponsored by Taiwanese autoparts maker Minth Group (敏實集團), as the struggling automaker seeks to shore up its financial position. The acquisition is led by a special purchase company managed by KJR Management Ltd, a Japanese real-estate unit of private equity giant KKR & Co, people familiar with the matter said. KJR said it would act as asset manager together with Mizuho Real Estate Management Co. Nissan is undergoing a broad cost-cutting campaign by eliminating jobs and shuttering plants as it grapples
The Chinese government has issued guidance requiring new data center projects that have received any state funds to only use domestically made artificial intelligence (AI) chips, two sources familiar with the matter told Reuters. In recent weeks, Chinese regulatory authorities have ordered such data centers that are less than 30 percent complete to remove all installed foreign chips, or cancel plans to purchase them, while projects in a more advanced stage would be decided on a case-by-case basis, the sources said. The move could represent one of China’s most aggressive steps yet to eliminate foreign technology from its critical infrastructure amid a
MORE WEIGHT: The national weighting was raised in one index while holding steady in two others, while several companies rose or fell in prominence MSCI Inc, a global index provider, has raised Taiwan’s weighting in one of its major indices and left the country’s weighting unchanged in two other indices after a regular index review. In a statement released on Thursday, MSCI said it has upgraded Taiwan’s weighting in the MSCI All-Country World Index by 0.02 percentage points to 2.25 percent, while maintaining the weighting in the MSCI Emerging Markets Index, the most closely watched by foreign institutional investors, at 20.46 percent. Additionally, the index provider has left Taiwan’s weighting in the MSCI All-Country Asia ex-Japan Index unchanged at 23.15 percent. The latest index adjustments are to
RSS