The question that is being proposed are based on the concepts of the economy slowdown and it is to know “Is Singapore’s economy is slowing down due to trade and heading towards a downward spiral to a pending recession.”
This project revolves around the formulation of a research question in order to support, object to, or expand on the claim(s).
Two publicly accessible datasets on the web have been used to answer the research question.
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In the website of Department of Statistics which is referred to as Singstat which shows the information on Merchandise Trades in Singapore (https://www.singstat.gov.sg/find-data/search-by-theme/trade-and-investment/merchandise-trade/latest-data). There are data’s which provides Merchandise Trade in Commodities, Merchandise Imports, Merchandise Exports as well as Domestics exports and re-exports. The particular data that was chosen is based on the spreadsheet is called Merchandise Trades by commodity level in current prices.
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In the website of Department of Statistics which is referred to as Singstat which shows the Gross Domestic Product in Singapore(https://www.singstat.gov.sg/find-data/search-by-theme/economy/national-accounts/latest-data) The data’s which are provided are as such, GDP in current price by Industry per Annum and Quarters, GDP Deflators in Singapore per Annum and Quarters, Chained dollars by Industry per Annum and Quarters as well as Contributions to the growth of GDP in Chained dollars per Annum. The particular data that was chosen is based on the spreadsheet called Gross Domestic Product (GDP) at current price, categorized by Industry (SSIC 2015) by Quarter. It shows the total GDP as well as for each industry in each quarter.
Datas that are referenced is as shown in Data sets for GDP and Merchandise Data Excel file as attached.
Based on the Delta of GDP shown above, there is a decrease of 3% in the 1st quarter of 2019. When Donald Trump had imposed his tariffs onto different materials being utilized by China, Such as Steel, Solar panels and Washing Machines. While the Delta of Merchandise trade has fallen with a significant 11.5% of trade being done due to the tariffs as well as the retaliation of China which affected the imports for United States of America.
Codes as shown are Python Scripts for Line Plots output for both GDP and Mechandise Trades.
For the Line plot as shown below, We can see a trend which stagnated during the period from 2018-2019. This is due to cases of impending trade war escalation during the year of 2018 as well as being affected by Great Britain possibility of exiting the European Union. That can cause limited impact due to the fact that they are one of the essential trade partners to Singapore.
By the start of Quarter 1 and 2 of 2019 as shown in Image 3, GDP consistently slowed down by 3% during the first quarter and another 0.4% in the subsequent quarter. This meant that the tariff did not affect Singapore too badly in the current quarter as we see prices from 2018 to 2019 to be flat since the percentages got evened out through its rise and fall during the two years.
As shown on the Merchandise Trade per Year shown below, due to the decrease in trades being made during the period from 2018 quarter 4 to 2019 quarter 1. We can see a downwards trend due to the unfavourable impact of 11.5% during that period of time. Even though it improved by 3.5% from the excel spreadsheet data in image 3. It can be seen that Singapore’s overall economy is indeed slowing down due to the Trade war that was imposed on the 2 major nations in the world.
Based on the graph for GDP as well as Merchandise Trade, we can see that due to the oil prices and volume volatility from Malaysia. It affected the trade during that period of time, but GDP still continue to show an upward growth.
Based on the summary statistics in comparison of GDP and Merchandise trade shown below, we are able to see the variances for based on the standard deviation, we are able to see that GDP has a larger spread of data points as it is further off from the Mean as compare to data of Merchandise trade. Which explains the trend of GDP while Merchandise trade only shows the trend being stagnate even after it went back to the same level during 2018-2019.
(Summary Statistics for GDP)
(Summary Statistics for Merchandise Trade)
From line plots that is shown in relation to the question of “Is Singapore’s economy is slowing down due to trade and heading towards a downward spiral to a pending recession.”. We can see that indeed based on the data itself. Singapore’s economy is slowing down to a stand still now. Which meant that the chance of getting a recession might be higher only if there are a negative impact for the GDP to be shown in the months to come. Only when the GDP gets decreased constantly throughout the months to come, then it will only result in a recession after that. This meant that the recession can hit Singapore during the period of the Q4 of 2019 if the situation starts to worsen overtime.
Conclusion
Based on the data set, there are not clear trend on the output of the data based on the line plot that we are seeing, as well as there is no clear correlation on the data set itself. Due to a number of factors such as the missing figures for Q3 and Q4 of 2019. Not to mention that there are external variables environmental factors, drop in retail sales can also reduce the GDP as well. While excessive spending or investment failures in the government can also affect the over GDP too. The data set can be further enhanced by stating the correlation of the effect of yield curve since the negative yield will lead to a recession that is prone to happen in the upcoming months or years.
While having the current data set shows the up and coming impacts in the Singapore economy, there can still be hidden factors such as unexpected speeches made by Donald Trump, Kim Jong Un nuclear talks or even the potential of no deal Brexit that might be happening in the up and coming years. This meant that, if the biggest factor of Singapore’s economy is due to the Trade war. Only when the issues are alleviated and negotiated among both sides of the country. The risk of recession that may be incurred can still be a highly anticipated risk.