China
China did not announce an anticipated stimulas package but still gave markets some cause for cheer.. the 8 percent target for the year was within reach! Collapsing exports have caused the third largest economy to weaken to 6.5 percent. Asian markets ended mixed yesterday as investors weighed Mr. Wen's pledge to keep growth at 8 percent against their dashed hopes for additional stimulus from the chinese government. China is seen as crucial to helping the world pull out of the global downturn. The abscence of a new stimulus package might mean that existing measures are sufficient to keep the country within target. And at the same time, keeping the "ammunition in reserve". A pretty prudent step.
Singapore
On Wednesday, MM Lee warned that Singapore's economy might contract as much as 10 percent this year should international trade continue to deteriorate. With deteriorating exports and world trade, the best case for Singapore right now is a decline of 5 percent. This figure will be subjected to the state of global demand. If exports continue to decline by 20 plus percent, there is high chance that a dip of 10 precent contraction would be reached. Some good news though: the purchasing managers index has inched back to slightly above 50 mark. This suggests that local manufacturers are gearing up to boost output. It should be interesting to watch how the stimulus package or the coming on-board of the IR, would work.
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