New cracks in the global economy as exports tumble

New Cracks Global Economy

If you were in any doubt that the US-China trade war is having an impact on Asia, look no further than Singapore’s latest export figures.

Singapore saw exports fall for a second month in a row, this time by 17.3% in the month of June compared to a year ago.

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This dramatic fall comes as Singapore’s growth figures released last weekshowed a 3.4% decline in growth in comparison to the last quarter.

So why should you care if Singapore is selling less of its stuff to the world than it used to?

Canary in the coal mine?

The city state is one of the most trade-dependent economies in the world, and is often seen as a global indicator for trade.

Analysts are calling Singapore’s data the “canary in the coal mine”, a reference to a well-worn expression to indicate there is danger ahead.

The phrase comes from when miners used to carry caged canaries into mine shafts, to let them know if it was dangerous. The canaries would die if there was even a hint of poisonous gas in the mines, providing a warning signal for the miners to get out.

The worry among Asia-watchers is that Singapore’s numbers are just a sign of more bad news to come from the rest of the region.

The trade war effect

There is increasing evidence to show that Asia’s economies are being hit by the US-China trade war.

“Around the region it is a similar story,” says Song Seng Wun, South East Asia economist for CIMB Private Bank.

“This trade war is coming at a time when global growth is slowing down after ten years of relatively stable times. Even if by some miracle a fairy taps her magic wand and the trade war disappears, all that would happen is that things would just be less bad – rather than really bad.”

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