Growing disconnect between stock market and underlying economy

THE local stock market has been going great guns in recent months, with the Straits Times Index (STI) rising to new all-time highs, boosted mainly by strong gains in the banks – most notably, DBS. 

Yet, the domestic economy is sluggish, although the recent quarterly data has led private-sector economists to raise their full-year forecasts slightly to between 3.2 and 3.5 per cent.

Globally, the picture is the same: The latest World Bank estimates indicate that by 2027, global gross domestic product growth may average only 2.5 per cent in the 2020s – the slowest pace of any decade since the 1960s.