Singapore’s economy contracted in the July to September period, but has narrowly avoided a technical recession. Asian countries have seen growth slow as a result of dwindling exports to Europe, the US and China. Gross domestic product shrank 1.5% compared with the previous three months, the Ministry of Trade and Industry said. However, growth in the April to May quarter was revised from a contraction of 0.7% to slight growth of 0.2%.
Many analysts were expecting the government to step in and loosen monetary policy to weaken the Singapore dollar. A strong dollar makes exports more expensive overseas, cutting into the profits earned by exporters. However, the Monetary Authority of Singapore (MAS) said it would maintain its policy of allowing a modest and gradual appreciation of the currency.
The Ministry of Trade and Industry said Singapore was still on track to achieve the target growth of between 1.5% and 2.5% for the year.