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.