Singapore Wins Hands Down When It Comes to Being a Good Place to Live

Posted on Saturday, March 30th, 2013 at 1:02 am in

All up, for me Singapore wins hands down when it comes to being a good place to live while working as an expat servicing the Asian region. But choice of location will very much be a function of what your target markets are. If China then you will find Hong Kong the better location. If the ASEAN nations then it would be Singapore. Of course I say that without having yet visited any other members of ASEAN — which clearly is something I shall need to do over the next couple of years, perhaps starting with something after a trip to Japan I have coming up in early-November.

What was the best bit for me? The Jurong Bird Park. I deliberately held off visiting it a second time to have something solid to look forward to down the track.

A reporter called me up and when I said I was in Singapore he asked ‘Which city?”

INTEREST RATES

Drought pushes out even further the timing of rate rises in New Zealand, so staying floating looks good,   though keep an eye out for discounted long ­term fixed rates.

I recall writing in this section many months ago that for this year I’d probably not have much to say with regard to interest rates because a rate rise would be well down the track and there would be lots of uncertain factors staying the hand of our central bank. The very last thing which they will want to do is repeat the 2010-11 experience where they raised the cash rate from 2.5% to 3% then had to cut it back down again because the data were bad from late-2010. The February 22 earthquake gave them a handy reason for reversing the earlier two tightenings.

Looking ahead now they see an economy who’s growth outlook is deteriorating due to the effects of the drought so far and the extra effects to come the longer it lasts. They see an exchange rate which is already high and know that once they start raising rates it will go even higher.

Yet they also know that with so many skilled people having left the country over the past five years, low training having been undertaken by businesses, and suppressed pressure building up for wage rises from people who’ve been asked to share their company’s pain the past five years, inflationary pressures from the labour market will eventually be a problem. Plus the housing market is rising firmly and building costs are going to head in only one direction — same as electricity prices, and Sky charges, and insurance premiums, and local authority rates, plus food due to the drought effect.

The RB will be extremely reluctant to risk relying much on unconventional monetary policy changes (in the NZ context) because if they over-estimate the impact of maximum loan to value ratios for instance they’ll have to later on play catch-up with the official cash rate and send the NZD through the roof.

What it all adds up to even before we start trying to factor in the many uncertainties overseas, is that they will not be touching the cash rate for quite time. That applies even taking into account this morning’s far stronger than expected GDP number showing our economy grew by 1.5% during the December quarter and not the 0.8% commonly expected. The NZ economy managed 2.5% growth last year after growing by 1.4% during 2011 and 1.8% during 2010. Our economy is now 8% bigger than in the depths of the recession in 2009 and almost 4% up from the late-2007 peak.

With regard to rate movements this week — nothing happened to suggest a break up or down in rates from trading ranges in place for many months now.

Source: Tony Alexander, BNZ Chief Economist

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