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Economy in Brief
U.S. Federal Government Budget Deficit Shrinks in July
The U.S. Treasury Department reported a federal budget deficit of $211.1 billion in July...
U.S. Mortgage Applications Rose Slightly in the Latest Week
Mortgage applications increased 0.2% (-62.9% y/y) from one week earlier...
German Inflation Rises
The German inflation rate as measured by the HICP accelerated to 8.4% in July...
U.S. Productivity Declines in Q2, Pushing Unit Labor Costs Higher
Nonfarm business sector productivity fell 4.6% (AR) during Q2'22...
U.S. Small Business Optimism Edged Up in July
The NFIB Small Business Optimism Index edged up to 89.9 in July...
Viewpoints
Commentaries are the opinions of the author and do not reflect the views of Haver Analytics.
by Louise Curley November 19, 2007
Singapore's current account continues to climb. In the third quarter, it was S$20,773 mil. on a seasonally unadjusted basis compared with S$18,263 million in the second quarter and S$14,289 million in the third quarter of 2006. The current account balance was 34% of Gross Domestic Product in the third quarter. The first chart shows the rise in the current account and in its percentage of GDP.
The combined capital and financial account continues to be much smaller than the current account with the result that Singapore' foreign reserves continue to pile up. In the third quarter after allowing for -S$2,634 million of errors and omissions, reserves were increased by S$6,031 million. At the end of the quarter foreign reserves amounted to S$226 billion. Since mid 2003, reserves have been close in amount to the annual rate of Singapore's Gross Domestic Product in nominal terms, as shown in the second chart.
Singapore in contrast to some of the other Pacific Rim countries who are accumulating reserves, has been more relaxed about letting its currency appreciate relative to the dollar. The dollar exchange rates of China, Japan and Singapore are shown in the third chart. The data are plotted on a log scale where the slope of data represents equal percentage changes. Thus the steep decline in the number of Singapore dollars to the U. S. dollar shows a greater appreciation to the dollar than the Japanese yen or the Chinese yuan.
SINGAPORE BALANCE OF PAYMENTS (NSA, Mil of S$) | Q3 07 | Q2 07 | Q1 07 | Q4 06 | Q3 06 | 2006 | 2005 | 2004 |
---|---|---|---|---|---|---|---|---|
Current Account | 20773 | 18263 | 16603 | 15317 | 14289 | 57661 | 47616 | 36414 |
Capital and Financial Account | -12108 | -7744 | -13496 | -8518 | -9078 | -33262 | -31923 | -12868 |
Net Errors and Omissions | -2634 | -1383 | -1592 | 2688 | -1205 | 2597 | 4703 | -3077 |
Change in Reserves* | -6031 | -9136 | -1515 | -9487 | -4006 | -26996 | -20397 | -20468.9 |
Total Reserves | 226290 | 220503 | 208876 | 208992 | 205096 | 208992 | 182813 | 183467 |