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Singapore firms the least optimistic in Asia: Survey

SINGAPORE — Business optimism in Singapore is the lowest in the region although the overall business sentiment for Asia as a whole has risen to a three-year high, according to a survey by Thomson Reuters and INSEAD released on Wednesday (June 21).

Singapore's Central Business District at night. TODAY File Photo

Singapore's Central Business District at night. TODAY File Photo

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SINGAPORE — Business optimism in Singapore is the lowest in the region although the overall business sentiment for Asia as a whole has risen to a three-year high, according to a survey by Thomson Reuters and INSEAD released on Wednesday (June 21).

Singapore posted the lowest sub-index score of 62 compared to the overall Asia sentiment index score of 74 — even if it was the “strongest lowest sub index” the survey has seen since it began in 2009, according to the report.

Overall business confidence in Asia rose to a three-year-high in the second quarter of the year, propelled by a slew of favourable economic data across the region and easing concerns over the health of China’s economy, said the report.

The Thomson Reuters/INSEAD Asian Business Sentiment Index, representing the six-month outlook of 101 firms, climbed to 74 in April-June from 70 three months earlier. A reading over 50 indicates a positive view.

“The world economy is starting to look more solid,” Singapore-based economics professor Antonio Fatas at global business school INSEAD told Reuters.

“The US is reaching good levels of GDP and employment, with Europe finally recovering and Asia seeing less risks ahead. China looks like it’s in a more stable situation after having ups and downs because of capital outflows over the last couple of years and also the risks of a debt crisis.”

China is widely expected to meet its 6.5 per cent economic growth target this year without too many bumps, helped by a pickup in exports and stable growth in factory output and retail sales. The government has also sought to reduce debt. Reflecting the upbeat picture, the country upon which much of Asia depends for trade scored a business sentiment sub-index of 75, up from 72 three months prior.

In nearby Japan, sentiment hit its highest-ever with a sub-index of 83 compared with 61 in the previous quarter and an average of 58 in the survey’s eight-year life. The country’s central bank in April offered its most optimistic assessment of the economy in nine years, saying it was turning toward expansion.

Buoyant consumer confidence and export growth that exceeded initial estimates helped Indonesia’s sentiment sub-index rise 8 points to 83, its highest in over a year.

Sentiment rebounded the most in South Korea with a 50-point jump in its sub-index to 75. The result came after the country’s new president vowed to review a decision to deploy a US anti-missile system which had angered China and prompted a boycott of Korean goods. “The cloud of political risk has disappeared,” Dr Fatas said.

“Last quarter the data for South Korea was looking weaker. There was potential for crisis with some trading partners, in particular China.”

Sentiment also edged up in India and Thailand, but weakened in Australia, Taiwan and the Philippines.

Thomson Reuters and INSEAD polled companies from June 2 to June 16. Of the 101 respondents, 56 per cent rated their six-month outlook as positive, the highest proportion in over six years. For the remainder, 37 per cent were neutral and 7 per cent were negative. REUTERS

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