In a recent survey of professional economic forecasters published by the Monetary Authority of Singapore (MAS) this month, it was projected that the unemployment rate of Singapore to remain at 2.1% at year-end, unchanged from the previous forecast.
The survey respondents also expect GDP growth to come in at 3.3% in 2018, up slightly from the previous survey.
“As reflected by the mean probability distribution, the most likely outcome is for the Singapore economy to grow by between 3.0 and 3.4% this year, unchanged from the previous survey,” MAS said.
For 2019, Singapore GDP is projected to expand by 2.6%.
Rising cost of living
At the same time, the CPI-All Items inflation and MAS Core Inflation are expected to come in at 0.5% and 1.7%, respectively this year.
In fact, the CPI-All Items inflation for 2018 as a whole was forecast to be 0.5%, down from 0.7% in the previous quarter survey.
For 2019, the CPI-All Items inflation is expected to go up to 1.3%, while MAS Core Inflation is expected to be 1.8%.
MAS said, “Respondents most commonly identified the easing of trade tensions as a possible upside to Singapore’s growth outlook.”
“Trade protectionism remains a key concern, with 100% of respondents citing an intensification of US-China trade tensions as a downside risk, up from 89% in the previous survey. In addition, a growing number of respondents flagged slower growth in China as a downside risk, on the back of tightening credit conditions,” it added.
Another downside risk flagged by the respondents is the “faster than expected US interest rate hikes”, which could trigger financial market turbulence.
If the US interest rate goes up, Singapore interest rate will also go up in tandem, putting pressure on most Singaporeans who borrowed heavily to finance their property purchases.
Under-employment not reported
The survey, however, did not show any figures to reflect the “under-employment” situation in Singapore. Many Singaporean PMETs who were retrenched, ended up driving taxi, becoming insurance or property agents, or working as odd-job laborers. The government data, of course, would reflect that these Singaporeans are still “employed”.
Hence, inevitably, they would receive a reduction in salary and enjoy a much lower standard of living than before.
Take for example, former Singaporean general manager Long Khin Keong has resorted to driving taxi to make a living after he was retrenched. He used to draw $15,000 a month in salary. But as a cab driver, he earns less than $2,000 a month. He said it would take eight months to earn $15,000 as a taxi driver.
He was forced to drive a cab after struggling for years to find a suitable job.
“Hopefully somebody ‘up there’ reads this and improves the predicament of many like myself,” he told the reporter. “I’m not asking to become a GM again, I just want to be somewhere I can contribute with my experience.”
Then there is Richard, aged 48, single and holds a master’s degree in financial management. He was a senior banker who lost his $14,000-a-month job.
Life has been a long struggle since. In between his search for full-time work, he did odd jobs such as washing dishes in a restaurant and distributing flyers, which of course would show that he is still “employed”.
He was willing to work as little as $3,000 a month as a caregiver but was told it required related experience.
“I am willing to adapt, but I feel employers are not willing to adapt. They keep wanting people with the right experience,” he said.
Singapore University of Social Sciences labour economist Walter Theseira commented, “Once they (PMETs) fall off a career track, it may be hard to get back on because, if the industry picks up again, employers may see jobs like driving Uber or selling property as irrelevant experience.”