Sometimes an island of 700 sq km can spread cheer across a surrounding landmass roughly 64,000 times bigger. Singapore's first-half gross domestic product numbers, released on Wednesday morning, helped ensure a good day for equity markets across Asia. Three stocks rose for every stock that fell on the region's 22 benchmarks; only Vietnam closed down.
There was not much reason, however, for the cheer to spread beyond Asia. That seems appropriate, because Singapore's rampant GDP growth (following a nasty year-ago fall) – an 18 per cent pace in the first half, the fastest since records began in 1975 – is an almost exclusively Asian phenomenon. Singapore is a decent leading indicator for the rest of the region, but not the rest of the world.
Take tourism: Singapore's two new casino-resorts, opened in February and April, have contributed to a surge in visitor numbers and double-digit output gains in the services sector. But the average year-on-year increase in arrivals in May from countries in Asia – led by Indonesia, India and Malaysia – was about triple that from countries outside it. The story is similar with exports. Non-oil shipments to Europe were a significant component of second-quarter growth, thanks largely to base effects. But track back a little further, and it is clear that exports of electronics and pharmaceuticals to Japan, China, Korea and Taiwan are what caused overall volumes to grow at a 20-30 per cent pace every month since December.