Crude prices are ticking time bombs.
The city-state’s trade hinges on oil exports, and unsurprisingly, as it plunged by 33.4%, Singapore’s total exports fell by 7.2% in 2015.
What’s even worse--analysts are predicting an even unstable 2016, caused by the continued weakness in crude prices.
According to analysts from Maybank Kim Eng, while the global economy is expected to grow by 3.2% in 2016, the uncertainty surrounding China’s slowdown leaves much to be worried about.
This over-dependence on China as an engine of growth was also noted by the Monetary Authority Singapore in a recent review.
“The report highlighted that Singapore’s comparative advantage in intermediate goods exports has enabled the country to position itself favorably within China’s supply chain and conversely is susceptible to an external demand shock as a result of this dependence,” Maybank Kim Eng said.
Meanwhile, non-oil domestic exports demand from China also weakened further.
“China, which remains the largest NODX destination at 14.9% of total NODX, saw shipments report further deterioration last month as it fell by double digits (Dec 2015: -18.7% YoY; Nov 2015: -9.1% YoY),” Maybank Kim Eng said.
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