WORRIES OVER GROWTH AND UNEMPLOYMENT
In contrast to the previous few years, the chance in 2025 is slowing progress somewhat than cussed inflation.
Singapore faces a decrease threat of direct tariffs from President Trump, provided that the US constantly exports greater than it imports from Singapore – with the singular exception being the pandemic 12 months of 2020.
Moreover, Singapore is the one Southeast Asian financial system with a bilateral free commerce settlement with the US – a deal that has been in place since 2004. This could provide some safety from tariff dangers.
Nevertheless, the nation will nonetheless be impacted by the tariffs’ destructive shocks to the worldwide commerce setting, given its in depth reliance on commerce as a small and open financial system.
We calculate {that a} 1 per cent fall in Singapore’s whole commerce may result in a 0.25 per cent decline in actual GDP progress.
Taking historical past as a information, the earlier US-China commerce struggle led to slower commerce progress in 2018 for Singapore, and merchandise commerce ultimately contracted 3.2 per cent in 2019.
All the financial system managed to eke out 0.7 per cent in actual progress in 2019, down from 3.4 per cent in 2018.
The federal government forecasts progress to sluggish to 1 to three per cent this 12 months, down from 4.4 per cent in 2024.
Slowing progress may have a knock-on impact on employment. Advance labour market estimates present that Singapore’s total unemployment fee was nonetheless low at 2 per cent in 2024, just like 1.9 per cent in 2023.
Nevertheless, if progress declines, unemployment and retrenchments may inch up. Sure segments could be extra closely impacted, akin to younger staff with out related job experiences.
For example, the 2024 Joint Autonomous Universities Graduate Employment Survey reveals that 87.1 per cent of contemporary graduates have been employed inside six months, down from 89.6 per cent in 2023. About 79.5 per cent discovered a full-time job, from 84.1 per cent the 12 months earlier than.
