Singapore central bank says trade woes spell more uncertainty
GROWTH in international trade is lagging global income for the first time in decades, spelling more uncertainty for the world economy, Ravi Menon, managing director of the Monetary Authority of Singapore, said yesterday.
“I don’t know if it is a short-term blip in the data ... or this is indicative of something more structural.
“And it is particularly of concern to Asia,” Menon told a seminar organised by the Milken Institute in Singapore
“Are we entering a new era of uncertainty?” Menon queried, underscoring worries among global policymakers about the extent of a slowdown in world demand.
The World Trade Organisation in June forecast sluggish trade growth this quarter accompanying its publication of a quarterly trade barometer for the first time.
The WTO forecast in April that global trade in goods would grow by 2.8 per cent this year, less than a previous forecast of 3.9 per cent.
Trade growth has averaged 5 per cent per year since 1990, but has not grown by more than 3 per cent since 2011.
Trade-dependent Singapore expects its non-oil domestic exports to fall by 3-4 per cent |this year.
Menon said the other worry for Asia is the tepid growth of private investment in the United States, highlighted by huge cash piles that are not being invested by companies.
A Moody’s Investors Service report earlier this year said US non-financial companies were holding US$1.68 trillion (Bt58.6 trillion) in cash at the end of last year, up 1.8 per cent from $1.65 trillion the previous year.
