Exports are a significant portion of GDPs to both economies but in very different ways. Singapore’s March non-petroleum export growth leaped by 18.5%. Key to the export gains were electronic and pharmaceuticals. Exports to Europe accounted for 56% and those to the US account for 19%. It’s important to note that Singapore’s oil exports have fallen over 13%. This demonstrates a key difference in both economies: Australia’s GDP growth is far more dependent on industrial commodity exports whereas Singapore’s GDP growth benefits from retail and pharma exports. Lastly, Singapore is a growing market for the super-rich in Asia. Singapore regularly hosts yacht shows and its strategic location at the southern tip of the Malaysian peninsula provides luxury moorings for those luxury yachts. Lastly, the city-state will host the Formula One Championship ‘Singapore Grand Prix’ for the next several years. Singapore is earning the title as the ‘Monaco of the East’.
Australia’s export grew 7.2% for all of 2014 weighed down by falling commodity prices and a slowing Chinese economy. Australia was benefitting from high demand for iron ore and coal until the slowdown. Some analysts do expect the Indian economy to make up for the slack in 2015. What Australia lacks in individual comparisons is made for by its comparative larger scale.
The question is: which currency will drive AUD/SGP?
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