The surprise 19.8 per cent slump in GDP from Singapore in the third quarter indicates a slowdown in global trade that could be the precursor to a double dip recession.
Singapore is the Asian nation most exposed to swings in the global trade cycle as some 50 per cent of GDP is from exports. The 19.8 per cent contraction in Q3 GDP was worse than the 15.7 per cent fall forecast by 19 economists surveyed by Bloomberg.
This kind of downswing in trade is what we saw in Q3 of 2008 before the global financial crisis. But the slowdown in Q3 is all relative. Singapore is still on schedule for 13 to 15 per cent GDP growth in 2010, making the city state the world’s fastest growing economy.
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