The bad news – Singapore faces mushrooming global headwinds
As one of the most open economies in the world, Singapore cannot escape harm when the global economy is buffeted by strong headwinds.
The brutal hikes in interest rates all over the world this year typically take 12–18 months to impact demand which will therefore start to cool perceptibly in 2023. Similarly, the energy price shock earlier this year will also work its way through to reduce spending. As consumers and businesses pull back, overall demand will cool and so demand for our exports will tumble. The outlook is made worse by the downturn in electronics which dominates Singapore’s exports. The prices of commodities used in production such as thermal coal, base metals and rubber will tend to fall, hurting our neighbours’ export earnings and, by extension, the services they demand from us.
In addition, as a major global financial centre, the likely plethora of…
