WITH the economy decelerating markedly in the third quarter to grow by just 0.6 per cent over the year, Singapore is experiencing its slowest growth since the height of the global financial crisis in 2009. All the main engines of growth seem to have stalled: it was not just manufacturing that contracted, but the much-vaunted services sector - which had been resilient in the last two years of sluggish growth - also shrank in Q3.

The poor GDP data is corroborated by a slew of other economic indicators. Retail sales have plummeted, trade has been moribund, and the economy is beginning to shed jobs at an alarming rate. In the second quarter of 2016 (the latest figures by the Ministry of Manpower, or MOM), redundancies and graduate unemployment reached levels that were last seen during the global financial crisis. The re-entry rate into the workforce after being made redundant was the lowest since June 2009.

The corporate sector is also under significant stress. Demand from businesses for loans has fallen as corporates hold off on big-ticket, long-term investment plans, reflecting dimmer growth opportunities in the near term and an uncertain macroeconomic outlook in the medium term. Prompt payments by small and medium-size enterprises (SMEs) are slowing - a clear sign of increasing stress in the corporate sector - while overall business sentiment is weighed down by falling profitability, as measured by the SBF-DP SME Index.