Stagflation looms in Singapore

Here are two charts to prove that Singapore will be home to the weakest growth and one of the highest inflation rates in Southeast Asia.

According to DBS Group Research, this year is proving to be a difficult year for the economy and a tricky one for policy makers. After a solid 9.4% (QoQ, saar) surge in GDP in the first quarter, the economy likely contracted by 1.1% in the second quarter while inflation will be persistently high, it said.

Here's more from DBS:

2012 will go down in the books as a year of slow growth and high inflation. In fact, there were only a few occasions in the last 30 years that GDP growth was lower than inflation.

GDP growth fell below inflation in the 1985 manufacturing recession, the 1998 Asia financial crisis and the tech recession in 2001. Against the US financial crisis and the ongoing Eurozone debt crisis, such a phenomenon has occurred in four out of the recent five years, including 2012.

Compared to its neighbours, Singapore will experience some of the slowest GDP growth and highest inflation rates this year.

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