The Ministry of Trade and Industry released its report for Q2's economic performance on 14
July. "Miserable", "grim", "tepid" are the terms used in news
reports to describe the current state of Singapore economy.
Our gross domestic product grew by only 1.7% year on year. And on a
seasonally adjusted and annualised basis, the economy shrank by
4.6%!
We know that a slowing economy is not a good sign for Singaporeans.
But pushing the economical jargon aside, what does it really mean
for us?
Last week, we at GET.com shared with
you some of the impact Singaporeans may feel from our slowing
economy. Here we would like to share with you 3 other things
that you can expect from a shrinking economy.
1. More Expensive Trips To Some Destinations
The value of our currency dropped against the US greenback. With
Singapore dollar weakening, you can expect to pay more for your
trip overseas, especially the US.
A trip to China is also going to cost more than before as the
Singapore dollar has also weakened against Chinese Yuan. And this
trend will likely continue with our economy forecast to slow in the
later half of the year.
However, some of the destinations are becoming cheaper. Currencies
in our neighbouring countries such as Malaysia, Indonesia and
Australia have been weakening for the past few months too. The Euro
is also falling due to the unfolding debt crisis in Greece. So you still have choices!
2. Less Bonus
The decline in our economy is broad based and many businesses are taking
a hit. Whether you are in the manufacturing, services, or
construction sector, the company you work for is likely to be
affected.
What this potentially means is that you can expect to get a smaller
bonus, if any, this year. If companies are not making enough
profit, or if they miss their financial goals, they will probably
cut bonus pay to their employees.
Adding the fact that companies in Singapore are already facing a
wage pressure, this is more likely to happen. And it will probably
be more evident in high-skill industries.
3. Lower Property Prices
We have seen this happen before. When economy is in a bad shape,
property prices will drop.
During the Asian financial crisis in 1997/1998, property prices
fell sharply. Then in 2008 when global financial crisis battered
Singapore's economy, property prices were again on a steep
decline.
Singapore's property prices have been falling for some time since
the government introduced cooling measures. With the economy
wobbling ahead, prices of properties are expected to slide
further.
On the other hand, there's also expectation that the government will review
the cooling measures towards the end of the year. What will happen
between now and then is difficult to predict.
This article was originally on the GET.com
blog at: 3 Things Singaporeans Can Expect From A Shrinking
Economy.