Singapore. The race to build microchips to meet global demand for electronic gadgets is exaggerating Singapore's economic rebound, creating a potential headache for policymakers deciding whether to tighten monetary conditions for the first time in six years.
Over the last twelve months, the city state has moved from the cusp of recession to record some of the fastest growth rates in the developed world - a turnaround founded on an explosion in output from its burgeoning semiconductor industry.
But despite wide-held expectations that the central bank will finally move next year to tighten by strengthening the Singapore dollar, the narrow base of that economic resurgence has some analysts questioning whether Singapore is ready.
"The problem is the sectors which are doing well don't employ that many workers ... so the benefits onto the rest of the economy are quite limited," said Brian Tan, an economist at Nomura in Singapore.
Unlike most analysts, Tan doubts that the Monetary Authority of Singapore will tighten policy next year.
Tan estimates that the semiconductor industry, making microprocessing chips used in a host of devices like iPhones, employs only around 1 percent of the total workforce but accounted for nearly half of Singapore's 5.2 percent third quarter growth rate unveiled last week.
That growth rate is triple the comparable rate in Japan and more than double that of the United States and the euro zone.
More than two-thirds of respondents to a Reuters poll in October said they expect the MAS to tighten policy by strengthening the Singapore dollar next year.
The MAS is one of the few countries that manages monetary policy through its exchange rate, rather than interest rates, letting the Singapore dollar rise or fall against the currencies of its main trading partners within an undisclosed band.
A pick-up in the global economy could also lean MAS towards tightening. This week, the central bank of South Korea, another trade-reliant economy, became the first major Asian central bank to raise interest rates in three years.
So far, the government has stuck with a fairly conservative forecast for 1.5-3.5 percent economic growth next year, even though its expectations for 2017 have been revised up to 3.5 percent.
And asked about its outlook after the growth numbers were unveiled a week ago, the MAS merely said the monetary stance announced in October - where it kept policy steady but tweaked its forward guidance - remains appropriate.
Those who do not expect any change to policy next year see the semiconductor boom as off-trend and temporary, pointing to softness in other sectors.
The construction industry, for example, has been shrinking for five straight quarters on an annual basis.
Kenneth Loo, the president of the Singapore Contractors Association, told Reuters the rot could last for at least three more quarters.
"There is stiff competition driving prices down," Loo said.
Analysts say a steady 3 percent expansion in the services sector, which accounts for roughly 70 percent of the economy, is a better gauge of Singapore's long-term economic health.
Other economic metrics also remain fragile.
In labor markets, there are more people looking for work than job openings. Wage growth has slowed compared to a year ago, and core inflation at 1.5 percent is running below the historical average.
"I think they [MAS] may stand pat in 2018," Andy Ji, a strategist for Commonwealth Bank of Australia in Singapore said, adding that inflationary pressures are muted and growth could peak in 2018.
The biggest driver of Singapore's manufacturing boom is also likely to fade by the second quarter of next year, the president of the Singapore Semiconductor Industry Association CK Tan told Reuters.
"This market is purely driven by the consumer. This is probably the traditional period where you should see a high manufacturing output, purely for the festive season," Tan said.
Tan said the momentum has traditionally slowed in the second quarter when the industry takes stock of inventories after the holiday season. Statistical base effects will also fade, given the high growth rates the sector has seen since late 2016.
That slowdown would coincide with the first of the Monetary Authority of Singapore's biannual meetings in April.