Chart of the Day: Here’s solid proof that Singapore’s outstanding loans are plummeting

It has contracted by 2.7% in June.

The city-state’s credit is a sign that darker days are coming for the city-state, with credit contraction at its lowest since the 90s.

According to a report by BMI Research, this suggests that the economy has entered a period of deleveraging following a massive run-up in corporate credit uptake from 2009- 2014.

Meanwhile, BMI Research added that the other half of Singapore’s economic stagnation is related to the domestic factors of disappointing productivity growth and slower population growth.

“The sum of these two factors, which are crucial determinants for overall economic growth fell to a six-year low in 2015, and it is unlikely that a significant pick-up will be witnessed in the near-future,” the report noted.

Additionally, productivity growth is also harder to come by given that Singapore is closer to the technology frontier.

“While the government is devoting significant resources towards boosting productivity via myriad avenues, these measures will take time to bear fruit,” the report added.