Quick take: MAS policy response constrained by cost pressures, says ANZ

SINGAPORE'S non-oil domestic exports (NODX) continued to be in negative territory in the third quarter.

NODX fell 8.4 per cent year-on-year in August to S$13.25 billion, following a 0.7 per cent decline in the previous month, due to a contraction in both electronic and non-electronic NODX, according to IE Singapore.

Here are some quick thoughts from Weiwen Ng, economist (Asean and Pacific) at ANZ Research:

"The Singapore economy is unlikely to see an export-led lift, with growth momentum in China wobbling and domestic demand in rest of EM Asia lacklustre.

"While the US recovery is firm, it has been led by the services sector rather than the goods producing sector, further constraining the activation of the US supply chain and contributing to the ongoing 'trade recession' in this region.

"For Singapore, the undershooting in growth with core inflation still benign (for now) would usually warrant an easing in monetary policy settings when the central bank (Monetary Authority of Singapore) next meets in October. However, MAS policy response is likely to be constrained by its focus on cost pressures arising from a tight labour market as well as higher debt servicing costs on rising rates."