Here’s why Singapore is a nifty barometer for predicting Asian recessions

Its trade is very sensitive to external demand.

If history is any indication, the city-state falling into recession is a sign that its neighbors would shortly follow suit.

During the tech recession in 2001 and global financial crisis in ‘08-’09, Singapore was one of the first few countries to slip into recession, alongside Taiwan and Hong Kong.

According to analysts from Bank of America Merrill Lynch, the island nation is the first country which releases a flash GDP estimate, making it a useful leading indicator for the rest of Asia.

“During the global financial crisis, after Singapore slipped into a recession in 3Q 2008, Malaysia, India, Thailand and the Philippines all followed suit and slipped into recession one to two quarters later,” BofAML said.

“Indonesia and Korea saw one quarter of negative quarter-on-quarter growth. China’s growth moderated but did not contract,” they added.