Singapore’s economy appears to be benefitting from tourists and business travellers shunning Hong Kong. Since the Hong Kong protests intensified in July, tourist arrivals to Singapore have picked up. Meanwhile, hotel occupancy rates have jumped and were close to a record high in October, based on our seasonally-adjusted measure. Data published by the Singapore Tourist Board show that this had fed through to hotel revenues which have also experienced a significant boost over the past few months. The bright prospects for the sector have helped push merger and acquisition transactions in the hospitality industry up five-fold in the first eleven months of the year. Overall, we estimate that the strength of the tourist and hospitality sector has boosted growth in Singapore by around 0.1-0.2%-points this year. However, this strong growth is failing to offset the drag from weak global demand, and we expect Singapore to grow by just 0.7% this year, which would be the weakest pace of expansion since the global financial crisis.
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