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While the post-pandemic economic rebound is expected to slow down significantly, Singapore is still on track to outperform other developed economies, except for Hong Kong, which is likely to see a bounce-back after its GDP contracted again in 2022.

world economic growth projections 2023
Image Credit: Savills Singapore

At forecast of 2.3 per cent local GDP growth (in real terms), Singapore would outperform USA’s one per cent and EU’s measly 0.5 per cent by 2.3 and 4.6 times respectively, continuing its historical trends of first closing the gap and now overtaking Western nations.

In fact, the entire Asia is predicted to do much better than the West this year. This includes the typically sluggish Japan, though 4.5 per cent growth in countries like China or Malaysia is still below what could have been expected before the pandemic, suggesting they’re not out of the woods yet.

Inflation easing, but still above normal

Inflation in Singapore has just hit its lowest level in seven months, driven down by decreasing transportation costs, while latest GDP figures beat the expectations, setting a positive tone for 2023.

Price growth is expected to hover around 4.5 to 5 per cent this year, a bit higher than the forecast of 3.2 per cent for the US (since spike in prices started several months earlier in the US and is about to wind down a bit earlier too) but still below the, yet again lagging, EU which is expecting to see 6.3 per cent for the whole of 2023, facing a double-whammy of higher prices and lower economic output.

China to the rescue

While economic threats remain global, they are bound to be eased somewhat in Southeast Asia thanks to China’s post-pandemic reopening which is about to unleash a wave of millions of visitors from the Middle Kingdom after three years of strict lockdowns.

View of immigration control at Changi International Airport in Singapore

Singapore, Malaysia and Thailand are among the most likely beneficiaries, particularly as pre-pandemic tourism in ASEAN was dominated by the mainland Chinese.

It couldn’t come at a better time, given the fears of global recession and still unclear outcome of the war raging in Ukraine.

Talent shortage supports high employment

Despite a bit rockier year ahead, employment situation in Singapore is bound to remain good given the painful shortage of talent that most local companies continue to report.

Unemployment is already down to pre-pandemic levels while the number of vacancies was still above 110,000 in the third quarter of 2022 — most of which (60,600) in PMET professions, according to Singapore Department of Statistics.

In addition, as tourism and hospitality rebound even more, jobs will return to the market catering to Chinese tourists, as well as Koreans and Japanese, who are also gradually returning to global travel.

So while the economic prospects aren’t quite as rosy as they were last year (even if they were somewhat dampened by high inflation), they should remain much more positive than in most other countries throughout 2023.

It’s still a very good time to look for a career upgrade, a new job or a salary raise, as predicting what 2024 may bring is exceedingly difficult right now.

With Russia digging in for the long-haul in Ukraine, global perspectives may remain grim as high energy prices are bound to stay for at least a few years before reasonable remedies are deployed, particularly in gas-starved Europe.

However, should the conflict wind-down suddenly, find a diplomatic resolution or see Russian withdrawal, global economy could receive a huge boost of optimism.

Alas, since neither scenario can be ascertained with a high degree of confidence, the best approach is to make the most of the current (relative) prosperity while it lasts.

Featured Image Credit: Depositphotos

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© 2021 GRVTY Media Pte. Ltd.
(UEN 201431998C.)

Vulcan Post aims to be the knowledge hub of Singapore and Malaysia.

© 2021 GRVTY Media Pte. Ltd.
(UEN 201431998C.)