Inventory cuts conceal Singapore's true woes

But make only one alteration and things don't look so bad at all.

Take changes in inventories out of the figures and that third-quarter gross domestic product growth rate goes from the reported negative 0.7 per cent to a positive 5.5 per cent, higher than in the second quarter.

It suggests that there has been a fair bit of belt-tightening this year.

Rather than importing consumer and industrial goods, Singaporeans have been emptying these goods out of their warehouses, which is also why the current account surplus in the third quarter has grown to a massive S$8.8 billion.

Export growth is flat but import growth has tumbled.

Not all looks rosy, however. The manufacturing sector's share of GDP has declined, which is only to be expected during an Asian economic slump, but the financial services sector's share has been rising and this looks a little curious.

How does a small city-state, which bases its economy heavily on being an international financial centre, manage to show growth in financial services when its neighbours are suffering a serious financial crisis?

For instance, the Asian currency unit (ACU) business, effectively the offshore US dollar market in Singapore, depends heavily on borrowers in Indonesia and the latest figures show that the slump there has driven the growth of ACU assets down by 16 per cent year-on-year.

Malaysia meanwhile has squeezed down the offshore market for its shares in Singapore, another sizeable component of the financial services sector.

Singapore's attempt to make up for this at least partially by starting up a Hang Seng futures contract has so far run into serious obstacles from Hong Kong which does not like the idea one bit.

Yes, banks and other finance houses are still setting up shop in Singapore but they're not hiring madly. They come because of attractive breaks that will keep their costs down but they haven't got the business to drive their revenues up. Singapore has got a thirsty horse which it can't lead to water.

This resilience of Singapore's financial services sector may yet turn out to be just a case of totting up the figures the simple way by counting people working in offices just before those people are shown the door.

And it could happen at the same time that the warehouses finally run empty and imports have to start rising again. Don't count on Singapore working its way out of this slump all so quickly.