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Strategies & Market Trends : Mish's Global Economic Trend Analysis -- Ignore unavailable to you. Want to Upgrade?

To: mishedlo who wrote (27268)	4/11/2005 12:09:08 PM
From: Chispas	Read Replies (1) \| Respond to of 116555

Singapore economy plunges into recession, GDP loses 5.8%.... .. Financial Times Monday 11th April, 2005 (Very unfriendly bourse to trade is the Singapore Exchange, in my opinion - Chispas) Singapore’s economy suffered its first quarter-on-quarter decline in nearly two years in the first three months of 2005, undermined by a sharp fall in pharmaceutical production, according to a preliminary government estimate on Monday. Gross domestic product in the first quarter shrank by 5.8 per cent on an annualised basis from the fourth quarter of 2004, while on a year-on-year basis, GDP expanded by a sluggish 2.4 per cent. The weak economic data underscored how Singapore’s increased dependence on the volatile pharmaceutical industry was creating great swings in the city-state’s quarterly growth rates. The ministry of trade and industry noted that the slowdown occurred after “exceptionally robust growth” in the drugs sector in the previous quarter. Drug production can fluctuate widely from month to month, in contrast to electronics, Singapore’s other mainstay industry, whose production cycles can be measured in months and even years. The production of pharmaceuticals is affected by long chemical processing times and frequent shutdowns of facilities for cleaning. The value of output is also affected as drug plants switch from one product to another, with each priced differently. Drug production shrank 11.6 per cent in January from a year earlier and then fell by more than 60 per cent in February, which had prompted many economists to cut their forecasts for the first quarter. In contrast, growth for other manufacturing industries, such as electronics, in the first quarter was “still healthy”, although slowing, the ministry said. Total manufacturing, which accounts for a quarter of GDP, grew by 3 per cent year-on-year in the first quarter. Economists are expected to cut their 2005 forecasts based on the poor industrial performance for January and February, which formed the basis for the preliminary government estimate for the first quarter. The government has predicted a growth rate of 3-5 per cent for this year, but some economists now believe economic performance will come in at the low end of the estimate. GDP expanded by 8.4 per cent in 2004, including 6.5 per cent growth in the fourth quarter. Although the volatility of the drugs sector could provide a surprise spurt of growth for the rest of 2005, economists note that Singapore is likely to face increased problems this year due to rising oil prices and higher interest rates, which will hurt export demand. The weak economic data could force the central bank to stimulate growth by abandoning its policy of a “modest and gradual appreciation” of the Singapore dollar in favour of a neutral stance when it meets today for a twice-yearly review. Singapore relies on its foreign exchange rate rather than interest rates to guide monetary policy because of the small and open nature of its economy. ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ feeds.bignewsnetwork.com

To: mishedlo who wrote (27268)	4/11/2005 2:53:15 PM
From: RealMuLan	Respond to of 116555

Household consumption in China fell to a record low has nothing to do with global trade, it has everything to do with the principle and policy of the economic reform in China. People still save as much there, if not more, but why do they spend less? That is because of the current trend of privatizing health care, education (including K12), as well as housing. If one does not have a couple of thousands of Yuan as cash, and if no proper health insurance, one cannot even enter the hospital, no matter how serious and emergent the case is (I read that a girl had to wait out of ER for more than 8 hrs with a knife in her back and bleeding badly. Because her family could not get the cash fast enough). In cities, even a elementary school student may cost 1000 Yuan or more for one single semester. A college student will cost 9,000-12,000 a year. And all these were free before. Not to mention a regular condo/apartment will take 20 some years of people's saving. All these are eating up people's savings. All thanks to the capitalism, market economy and privatization.