Thursday, July 28, 2016

Will Singapore Ease Policy To Cushion Brexit’s Impact?

Economic Research
28 July 2016

Economic Highlights

Britain’s decision to leave the EU adds another layer of worry to global economic growth. As the EU’s largest trading partner in ASEAN, the steep drop in the Euro (EUR) will likely pose a drag on Singapore’s exports and its manufacturers. At the same time, the spike in global uncertainty could spark coordinated easing from major central banks, especially from the European Central Bank (ECB) and the Bank of Japan (BOJ), though both are still waiting for post Brexit economic data to determine the impact and their next moves. This will likely keep the USD strong and commodity prices weak. Also, it would further pressurise Singapore’s services sector, which are closely linked with trade and rely on business from China and Indonesia for the bulk of their business. Overall, we project for Singapore’s real GDP growth to weaken to +1.4% y-o-y in 2H, from 2.2% in 1H.

Economist:  Ng Kee Chou | +603 92802179

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