While one financial crisis after another seems to be plaguing world markets, one Asian nation seems to be handling it all with a minimum of stress. Singapore, an island city-state off southern Malaysia with a population of fewer than 6 million in an area of 718.3 km, is the wealthiest economy in Southeast Asia. It continues to grow albeit slowly, boosted recently by an influx of visitors taking advantage of local hospitality and good consumer prices.

According to a report released Wednesday by the Department of Statistics, the economy of Singapore grew by 1.9 percent in the September quarter, compared with a 2.5 percent contraction in the preceding three months. The Ministry of Trade and Industry, however, is predicting growth to slow to 2 percent for all of 2015 with a possible economic expansion of only 1 and 3 percent in 2016.

In Wednesday’s statement, the MTI said, “Global economic conditions have remained sluggish, with full-year growth for 2015 likely to come in weaker than in 2014.” Compared to regional currencies, the Singapore dollar (SGD) has stayed strong. With a US interest rate hike set to be carried out towards the end of the year, there are more fund outflows from developing countries like Malaysia and Indonesia and these funds flow back towards developed countries which have resulted in the appreciation of the SGD compared to the rest.

…Although Singapore’s growth seems to be slowing, it remains more resilient compared to most

In fact, this has caused the SGD to appreciate to historic highs and although Singapore’s growth seems to be slowing, it remains more resilient compared to most and continues to fuel the SGD strength.

Missed a Recession

The city-state seems to have avoided a technical recession and the decline from a growth rate of 2.9 percent in 2014 is seen as a reflection of the slow export demands in Asia from major world economies including the United States, China and Europe.