Chart of the Day: See the rebound in Singapore's business loans this year

As companies push for greater productivity.

Loan growth bucked the downward trend in August when it posted an uptick to 11.8% YoY, up from 10.8% in the previous month. The improvement was led solely by a pick-up in business loans (15.9% YoY) despite further moderation in consumer loans.

With the slew of assistance schemes put forth by the government to help companies improve productivity, companies are gradually answering to the call and in the process, investing more and borrowing to make up for the shortfalls. 

Moreover, the increase in business loan growth may in part reflect companies venturing overseas and investing in anticipation of the global recovery. Plainly, as the drag from the macro-prudential measures on consumer related loans starting to wear off, hope is that the moderation in overall loan growth may be bottoming-out. 

The employment market remains tight and unemployment rate will stay at 2.0%, which is the full employment level for Singapore. Curbs in foreign manpower have stoked a labour crunch in. Job vacancies remained exceptionally high and unemployment low. This has led to continued increase in the job vacancies to unemployed person ratio. With output gap likely to remain positive and low chance of policymakers unwinding on the foreign labour curbs, unemployment rate will stay low for many quarters to come.