- Macro volatility unleashed from the Rose Garden 3-weeks ago is unlikely to abate anytime soon. Amidst global growth challenges, Singapore may be a relative safe haven.
- A low baseline tariff, resurging domestic demand from construction and an election budget, plus a national balance sheet capable of delivering aggressive stimulus if needed, should provide some cushioning as markets reconfigure to the New World Order.
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Domestic drivers could offer some cushioning
- While Singapore’s external trade dependency is high, we think the domestic economy may have bandwidth to absorb the worst of the shocks.
- First, a construction boom from public housing and private projects like Changi T5, Integrated Resort expansions, Tuas Port etc. is underway with contracts awarded surging +58% y-o-y year-to-Feb.
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- Third, during times of extreme stress, the government has delivered extra stimulus. During GFC, fiscal stimulus amounted to 7.6% of GDP and a further 1.5% GDP from past reserves drawdowns. During COVID, this increased to 14.4% GDP and an 8% respectively.
Screening for Singapore-first players
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