Singapore hints at global chip market rebound

Trade data from bellwether city-state point to rebound from the worst of the global electronics downturn

June marked another dismal spell for Singapore’s manufacturing sector, with factory output falling 4.9% in the ninth consecutive month of contraction. But a shallower decline in electronics saw semiconductors and components revert to positive growth, stoking optimism that the global memory chip market is beginning to recover.

Data released by the Singapore Economic Development Board (EDB) on July 26 showed electronics output contracting by 2.9% in June versus minus-23.7% in May. Though the numbers showed year-on-year declines for all clusters except transport engineering, electronic modules and components and semiconductors grew 7.5% and 3.1% year on year respectively.

The publication of Singapore’s factory results was coincident with an announcement by South Korea’s SK Hynix, the world’s second-biggest memory-chip maker, which said it saw early signs of the chip sector beginning to recover from a deep downturn amid robust demand for artificial-intelligence (AI) capacity, with rising interest in OpenAI’s ChatGPT seen as the main driver of demand.

“The worst of the global electronics downturn may be behind us,” said senior economists Chua Hak Bin and Brian Lee Shun Rong of Maybank Investment Banking Group. “A modest export boost from China’s reopening and possible stabilization in global electronics demand” could bring about a fourth-quarter manufacturing recovery in Singapore, they said in a research note sent to Asia Times.

Read the full story at Asia Times.

Nile Bowie is a journalist and correspondent with the Asia Times covering current affairs in Singapore and Malaysia. He can be reached at nilebowie@gmail.com.

Flagging ringgit bodes ill for Malaysia’s Anwar

Local currency tumbles amid rising investor perceptions ‘unity’ government hasn’t kept its word on reforming the economy

Prime Minister Anwar Ibrahim began his tenure with a pledge to enact structural reforms and boost investor confidence in Malaysia. But after eight months on the job, the veteran politician is finding it hard to pull the Southeast Asian nation out of a years-long economic funk.

The local stock market saw foreign outflows of 4.19 billion ringgit (US$920 million) in the first half of 2023, with a benchmark gauge that is among the worst global performers so far this year. The Malaysian ringgit has likewise tumbled, making it among the worst performers in Asia’s currency markets.

On the other hand, Malaysia’s economy grew above market expectations at 5.6% in the first quarter of the year, during which approved foreign direct investment (FDI) reportedly rose 60% year-on-year to 71.4 billion ringgit. Inflation moderated to a one-year low with the consumer price index coming in at 2.8% in May compared to last year, its slowest monthly pace in 2023.

Yet cost-of-living pressures and political dissatisfaction persists, with economic headwinds and external cyclical factors weighing on the government ahead of state elections in August that are seen as an early referendum on Anwar’s “unity” government, a multi-party alliance that sits uneasily with the long-rivaled political camps’ grassroots support bases.

Read the full story at Asia Times.

Nile Bowie is a journalist and correspondent with the Asia Times covering current affairs in Singapore and Malaysia. He can be reached at nilebowie@gmail.com.

Singapore winning on inflation, losing on growth

City-state contains price surge with aggressive exchange rate policy but likely slipped into a technical recession in the second quarter

Singapore’s central bank this week delivered a sobering economic assessment amid sluggish near-term growth prospects, ongoing inflationary challenges and predictions the economy is already in a technical recession. The Monetary Authority of Singapore (MAS) also emphasized that despite revising its 2023 headline inflation forecast downward, its battle against rising consumer prices is far from won.

The city-state’s trade-reliant economy faces mounting headwinds as external demand weakens amid a global economic slowdown. Earlier this year, there were certain hopes that a post-pandemic economic rebound in China would lift Singapore above its tepid current growth forecast of between 0.5% to 2.5%.

Those hopes have since faltered as China’s economic recovery loses steam, with fewer and fewer independent economists predicting Beijing will hit its 5% economic growth target for 2023. Singapore’s economy contracted in the first quarter, falling to -0.4% from the previous quarter’s growth of just 0.1%.

Economists believe that sluggish trade and industrial performance, driven partly by China’s faltering recovery, likely dragged Singapore into a technical recession in the second quarter, preliminary estimates for which are due later this month. 

Read the full story at Asia Times.

Nile Bowie is a journalist and correspondent with the Asia Times covering current affairs in Singapore and Malaysia. He can be reached at nilebowie@gmail.com.