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Singapore’s economy shrank at a slower pace in the third quarter

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While the trade-reliant Southeast Asian economy is showing signs of recovery, sluggish overseas demand and rising unemployment suggest a weak rebound.

Singapore’s economy continued to shrink in the third quarter, albeit at a slower pace than the preceding three months, data released on Wednesday showed, as the Southeast Asian country’s manufacturing sector bounced back to growth following coronavirus shutdowns.

Meanwhile, Singapore’s central bank left its monetary policy unchanged.

Gross domestic product (GDP) fell 7 percent in July-September compared with the same period last year, an improvement from a revised 13.3 percent contraction in the second quarter, preliminary data showed. Economists polled by the Reuters news agency had expected a decline of 6.8 percent.

Singapore, whose small and open economy has been hit hard by the coronavirus pandemic, kept its expectations for GDP to shrink by 5-7 over the whole of 2020.

On a quarter-on-quarter, seasonally-adjusted basis, GDP grew by 7.9 percent, equivalent to an annualised growth rate of 35.4 percent. The bounce marked the end of a “technical recession” as it followed two preceding quarterly contractions.

[Bloomberg]

But the Monetary Authority of Singapore (MAS), the central bank said that growth is expected to slow in the final quarter of this year and would remain modest in 2021, amid tepid external demand and restrictions on cross-border travel.

“The reality is that with continued prospects of anemic global demand and rising unemployment and bankruptcies at home the recovery is going to be very slow,” ING economist Prakash Sakpal said.

The country has been gradually lifting some of its lockdown measures to reopen its economy in recent months and signalled it wants to slowly resume tourism and travel.

Manufacturing expanded by 2 percent in the third quarter from the same period in 2019 after declining by 0.8 percent in the previous three months

Construction slumped 44.7 percent year-on-year in the three months through September after a 59.9 percent decline in the second quarter.

And services industries contracted by 8 percent after shrinking 13.6 percent year-on-year in the second quarter

Monetary stimulus

The MAS said its stimulatory monetary policy stance will remain appropriate for some time as the economy emerges from its coronavirus slump.

The central bank manages policy through exchange rate settings, rather than interest rates, letting the Singapore dollar rise or fall against the currencies of its main trading partners within an undisclosed band.

“As core inflation is expected to stay low, MAS assesses that an accommodative policy stance will remain appropriate for some time,” MAS said in its semi-annual policy statement.

Analysts also said they expect the MAS to continue to keep its stimulus measures in place for the foreseeable future.

“Inflation is expected to gradually recover by 2021 and that is going to anchor expectations that MAS will keep policy setting unchanged in 2021,” said Jeff Ng, senior treasury strategist at HL Bank.

The MAS said the core inflation rate – excluding volatile items such as food and fuel costs – will average 0-1 percent in 2021, while headline inflation is forecast to be between −0.5 and 0.5 percent.

Singapore’s main price gauge contracted for the seventh consecutive month in August, with prices falling 0.3 percent from a year earlier.

The country has spent about 100 billion Singapore dollars ($73.6bn), or 20 percent of its GDP, in virus-related relief to support households and businesses as it battles its worst-ever slowdown.

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Voting under way in Seychelles parliamentary, presidential polls

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President Danny Faure, in power since 2016, is facing voters for the first time in the three-day election.

Voting is under way in presidential and parliamentary elections in Seychelles, with President Danny Faure, in power since 2016, facing voters for the first time.

Polling stations opened on Thursday for a three-day election as the Indian Ocean archipelago nation is expected to see its tourism-dependent economy contract by 14 percent this year, according to ratings agency Fitch, due to the coronavirus pandemic.

The contraction would reverse some fragile progress made since the government defaulted on its debt in 2008 and sought an International Monetary Fund (IMF) bailout.

A ballot paper is seen at the English River polling station during the early voting for the presidential and legislative elections, in Victoria [Rassin Vannier/AFP]

The same party has been in power since 1977. Faure was previously vice president and became president when his predecessor resigned after a constitutional amendment was passed limiting presidents to two terms.

Despite the economic hardship, Faure is viewed as likely to retain power, in part because the opposition is divided.

An opposition coalition captured parliament in the 2016 election, but has since split. The leader of one its two parties told supporters to vote for the governing party after the electoral commission rejected his own presidential bid.

Walter Jeannevole, 45, said on Thursday he had cast his ballot for Faure.

“I trust that he will help the economy back on its feet and work for all Seychellois, like he is doing now.”

Some voters complained on Thursday they had to wait for more than six hours to cast their vote because there were too few voting booths [Herbert Labrosse/Reuters]

Faure’s two challengers – Wavel Ramkalawan, who has unsuccessfully contested the presidency since 1998, and Alain St Ange, a former tourism minister – have both promised voters that if elected, they will increase the monthly minimum wage of 5,800 Seychellois rupees ($318).

St Ange has also pledged to tackle a persistent complaint from locals that high-end hotels pay expatriate workers far more than local staff.

“I see Ramkalawan struggling to fight for justice for the country and now is the time to vote for him and make him our president,” said a Ramkalawan supporter who declined to give his name.

Some voters in the English River district of Mahe island complained on Thursday they had to wait for more than six hours to cast their vote because there were too few voting booths.

There are about 74,600 voters out of a population of 100,000. Polling is spread over three days and the results are expected on Saturday.

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Palestinian’s hunger strike entering ‘critical phase’: Red Cross

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ICRC calls on Maher al-Akhras and the Israeli authorities ‘to find a solution that will avoid any loss of life’.

A Palestinian man on hunger strike for 85 days since his arrest by Israel is entering a medically “critical phase”, the International Committee of the Red Cross said on Thursday.

Maher al-Akhras, 49, was arrested near Nablus and placed in administrative detention, a policy that Israel uses to hold suspected armed people without charge.

The father of six launched his strike to protest the policy.

He had been arrested several times previously by Israel.

“More than 85 days into the hunger strike, we are concerned about potentially irreversible health consequences,” said Yves Giebens, the head of the ICRC’s health department in Israel and the occupied Palestinian territories.

“From a medical perspective, he is entering a critical phase,” Giebens added in a statement.

The ICRC said it had been “closely monitoring” the situation.

“The ICRC encourages the patient, his representatives and the competent authorities involved to find a solution that will avoid any loss of life,” the statement said.

Palestinians in the occupied West Bank and the Gaza Strip have launched several demonstrations to demand the release of al-Akhras. They have also organised sit-ins and online campaigns to show their support for him.

Following his arrest in early July, al-Akhras was transferred in early September to Kaplan Hospital, south of Tel Aviv.

His lawyers have appealed on multiple occasions to Israel’s Supreme Court for his release.

Palestinian Prime Minister Mohammad Shtayyeh has also demanded his immediate release.

Israel’s administrative detention system allows the internment of prisoners for renewable periods of up to six months each, without bringing charges.

Israel says the procedure allows authorities to hold suspects while continuing to gather evidence, but critics and rights groups say the system is abused.

About 355 Palestinians were being held under administrative detention orders as of August, including two minors, according to Israeli human rights group, B’Tselem.

Palestinian women hold a placard bearing the portrait of Maher al-Akhras during a demonstration demanding his release at Beit Hanoon, known as Erez to Israelis, in Gaza Strip [File: Mahmud Hams/AFP]

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Israel strikes Gaza after rocket attack

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Israeli army says it struck Hamas military targets in the besieged strip after two rockets were fired into Israel.

The Israeli military says it launched overnight air attack in the besieged Gaza Strip after Palestinian fighters fired rockets, with no reports of casualties or significant damage on either side.

The military said Palestinian fighters fired two rockets into Israel late on Thursday. One was intercepted by the Israeli missile defence system, while the other fell in an open area.

“In response to the 2 rockets that were fired from Gaza at Israel earlier tonight, our Air Force just struck Hamas military targets in Gaza,” the Israeli army said on Twitter.

“Hamas will bear the consequences for terror activity against Israeli civilians,” it added.

Sirens were sounded in a region south of Israel that borders the Gaza Strip to warn residents of the incoming fire.

There was no immediate claim of responsibility for the rocket attack.

The last reported rocket attack from Gaza was on Tuesday night.

Israel and Hamas have fought three wars and several skirmishes since the Hamas seized power from rival Palestinian groups in 2007.

Israel holds Hamas responsible for all attacks emanating from Gaza, including those claimed by other fighter groups based in the region.

New tunnel discovered

Israel and Egypt have maintained a crippling blockade on Gaza Strip – a coastal territory which is home to two million Palestinians – since Hamas seized power.

The latest incident came after the Israeli army announced it had found a new tunnel that crosses “dozens of metres into Israel” from the Israeli-blockaded Palestinian coastal enclave.

The next day, the army said the tunnel belonged to Hamas.

Authorities have discovered some 20 tunnels originating from Gaza since 2014, army spokesman Jonathan Conricus said this week.

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