- April 17, 2023
- Posted by: admin
- Category: Centennial Asia Insights
Is singapore setting itself up for a fall?
- Singapore’s position as a globally-competitive economic hub cannot be taken for granted. Further policy calibration is needed to tackle cyclical and structural challenges.
- The external sector outlook has been worsening in recent months, which will likely spill over into domestic demand as the post-pandemic boosts recede.
- The city-state has had a good few years due to sound pandemic management, adept investment promotion, and setbacks experienced by rival hubs such as Hong Kong.
- However, concerns over the costs of doing business, particularly in labour and rental costs, are early warning signs that firms may look elsewhere if these issues are not fixed.
- Structural shifts in policy are required, including enhancing regional integration with neighbours, rethinking the education system, and pro-competition policy reforms.
Asian urbanization warrants plugging infrastructure gaps
- Emerging Asia is on the cusp of a rapid expansion in its urban population. This brings with it exciting opportunities for employment and business activity.
- However, investments into infrastructure need to be made now to ensure that the needs of the expanded urban population can be met to avoid downsides such as congestion.
- The medium-term financing needs for infrastructure are significant, with the transport, energy, and telecommunications segments facing their own set of challenges.
- Both public and private sector finance need to work in tandem to meet this challenge.
- Korea’s central bank kept its policy rate unchanged while pushing back against expectations of rate cuts in the year. Still-high inflation means that cuts are unlikely.
- Taiwan experienced continued headwinds in exports due to the technology cycle downturn. Inflation eases, weakening the case for further rate hikes.
- India’s industrial production remained healthy alongside other indicators.
- China will experience cyclical headwinds despite healthy figures in loan and export growth. Overt policy stimulus is unlikely, but measures to restore confidence may help.
Read more: CAA-Weekly-17-Apr-2023.pdf