Singapore GDP Below Forecast

FINANCIAL NEWS – In its third quarter, Singapore’s economy expanded at a much slower pace. This is along with the government’s efforts of extending moderation in the current quarter. Further, the Singaporean government raised warnings regarding the possible impact of US-China trade war on the growth in 2019.

The softening outlook for Singapore depicts a shakeout in financial markets in the recent months. This is amid the worries of investors on world trade, investment, and corporate earnings prospects.

There was a 3.0% increase in the July-September quarter from the last three months on an annualized and seasonally adjusted basis. On Thursday, the Ministry of Trade and Industry (MTI) revealed the revised final figures.

That was well lower than the initial estimation of the government to 4.7% growth for October.  Moreover, it was below than the median forecast of 4.2% in a Reuter’s poll of 11 analysts. The economy made a 1% expansion in the second quarter.

Canada has launched an investment tax break for businesses

The respite in the manufacturing sector drove a softer than expected economic momentum in the third quarter. This factor looks set in making the policymakers to become cautious amid the US-China trade war.

“We did expect industrial production growth to moderate. But the pace of moderation was more prominent than initially thought,” UOB economist Alvin Liew said.

The manufacturing sector of Singapore increased 3.5% in the third quarter from last year. It made a sharp slowdown from the 10.7% growth in the quarter earlier.

Financial News: Canada launches investment tax break

According to Finance Minister Bill Morneau on Wednesday, Canada will allow businesses to write off additional capital investments. This is to urge companies to become competitive at the time when the US makes aggressive acts to cut taxes.

However, Morneau said that Ottawa has no plans to cut taxes to match Washington’s aggressive moves.

“If we were to do that, it would add tens of billions in new debt,” he told the House of Commons.

The move could hurt business groups that Ottawa indicated to bring more efforts in matching the US cuts. Moreover, Ottawa recognized their worries and said that it would be neither rational nor responsible to do nothing.

For the year 2018 to 2019, the updated budget revealed a deficit worth C$18.1 billion ($13.7 billion). This was lower than the revised $18.8 billion projection included in the February budget. The fiscal year ends on March 31.

Moreover, Ottawa is introducing an accelerated capital cost allowance for all businesses. It also allows the eligibility of some clean energy equipment for an instant write-off.