By Jessica Yeo
Nanyang Chronicle - BE PREPARED to tighten your purse-strings,
as Singapore’s economic growth is expected to slow in the wake of
the Wall Street meltdown and US housing crisis, according to the
latest forecast from NTU’s Economic Growth Centre.
The university’s economists expect the 2008 Gross Domestic
Product (GDP) growth to come in at the lower end of the
government’s 4-5% growth forecast. However, the expected GDP growth
could drop “subject to further (negative) risks such as a US
recession,” said Dr Choy Keen Meng, and added that this would
affect Singapore’s export-centered economy.
“The model I used for the Singapore economy forecasts has got
multiple equations that take into account… relationships between
key… variables of the economy such as GDP growth, inflation,
foreign demand, the exchange rate, etc,” said Dr Choy, who has been
forecasting Singapore’s economy since his days as an economist at
the Monetary Authority of Singapore in 1988.
With a falling GDP, the man on the street is likely to suffer
reduced wages and stiff competition in the job sector.
University economist Dr Randolph Tan who specialises in
econometrics, a study combining economic theory and statistical
methods said: “Our forecasts for the jobs market (are) a negative
one in line with our economic forecasts.”
“The main thing I feel will determine the overall economic
environment and the extent of jobs losses in Singapore is the speed
with which the final resolution of this U.S. financial crisis can
result in a recovery of sentiment,” said Dr Tan, who believes the
USD700 billion bailout plan will do the trick..
The slump here in Singapore will only be felt in late 2008 and
early 2009, said Dr Choy, as the crisis is occurring on a global
scale.
On the other hand, there is a bright spark among the bad news,
said Dr Choy. People can look forward to falling prices and higher
real wages next year, as the inflation rate is expected to plummet
sharply to 3%. Due to slowing economic growth and subsiding price
pressures for oil and commodity, “households don’t need to worry
about further rises in prices,” he said.
Volatile oil prices are expected to stabilize between US$80-100
a barrel, good news for those who drive. Many people were
speculating that oil prices would go up so they bought more oil in
the past, driving up its price explained Dr. Choy. However, in his
view, the current economic crisis has left everyone pessimistic and
eliminated the speculative element.
“Why should oil prices increase when all economies are growing
at a slower rate and might even go into recession,” he said.
However, OCBC mobile banker Amber Tan, 22, is doubtful as
consumers stand to lose “if their rate of pay increment falls
substantially lower than the actual rate of inflation.”
combining economic theory and statistical methods, said: “Our
forecasts for the jobs market (are) a negative one in line with our
economic forecasts.
“The main thing I feel will determine the overall economic
environment and the extent of jobs losses in Singapore is the speed
with which the final resolution of this US financial crisis can
result in a recovery of sentiment,” said Dr Tan, who believes the
US$700 billion bailout plan will do the trick.
The slump here in Singapore will only be felt in late 2008 and
early 2009, said Dr Choy, as the crisis is occurring on a global
scale.
On the other hand, there is a bright spark among the bad news,
said Dr Choy. People can look forward to falling prices and higher
real wages next year, as the inflation rate is expected to plummet
sharply to 3 per cent. Due to slowing economic growth and subsiding
price pressures for oil and commodity, “households don’t need to
worry about further rises in prices,” he said.
Volatile oil prices are expected to stabilise between US$80-100
a barrel, good news for those who drive. Many people were
speculating that oil prices would go up so they bought more oil in
the past, driving up its price explained Dr. Choy. However, in his
view, the current economic crisis has left everyone pessimistic and
eliminated the speculative element.
“Why should oil prices increase when all economies are growing
at a slower rate and might even go into recession,” he said.
However, OCBC mobile banker Amber Tan, 22, is doubtful as
consumers stand to lose “if their rate of pay increment falls
substantially lower than the actual rate of inflation.”
http://www3.ntu.edu.sg/chronicle/news/vol15no4/p1.html
