Domino effect triggered as weak trading partners threaten Singapore’s growth

China, Indonesia and Malaysia’s GDPs have moderated recently.

As goes its major trading partners, so goes the city-state. As these three economies make up a third of Singapore’s goods exports and are also significant sources of demand for services, the island nation will also suffer softening demand from these economies.

According to the macroeconomic review of MAS, the demand for Singapore’s external-oriented services will also remain uninspiring.

“With intra-regional trade flows likely to remain muted in the near term, Singapore’s port traffic and other ancillary logistics activities are expected to turn in modest performances for the rest of the year,” the review said.

MAS cites the air cargo volumes as an example, which recorded its lowest reading since December 2012, and container throughput which has also weakened since the beginning of the year.

“Notwithstanding the uptick in visitor arrivals over the last six months, persistent softness in the regional economies could temper tourist arrivals for the rest of the year and into 2016. This would have a knock-on effect on the retail and food & beverages industries,” MAS added.