The specter of recession hangs grimly over the world economy. Bond markets this week signaled a looming contraction in the U.S. Global manufacturing is already shrinking. In Asia, Singapore's move to slash its growth outlook on August 13 underlined the fact that Asia's trade-dependent economies now face their bleakest moment since the global financial crisis -- one where their governments are set to struggle to respond.
Singapore's economy flatlined in the most recent quarter, prompting it to cut forecast growth to between zero and 1% this year, down from between 1.5% and 2.5% earlier. In July, Prime Minister-in-waiting Heng Swee Keat said his country was not yet expecting a "full-year recession."