S’pore rebound masks consumer pain as job losses mount

Bloomberg

Singapore’s economy may be picking up, but consumers aren’t feeling it. After two years of below-par growth, economists and even the government are becoming more positive on the outlook. While it’s not boom time yet, the consensus is that 2017 growth will come in higher than last year’s 2 percent. A large part of that is down to exports: Singapore, like other trade-reliant nations in Asia, is benefiting from a recovery in global growth, which is translating into rising sales of electronic goods.
But good news is masking pain on the ground. Consumer spending — which makes up a third of the economy — has contracted for two straight quarters, unemployment is rising, wage growth is slowing and household debt is increasing.
The bottom line: it’s too early to get excited about Singapore’s rebound. Weiwen Ng, an economist at Australia & New Zealand Banking Group in Singapore, argues that consumer spending will remain weak, while the export recovery will fizzle out in the second half of the year.
All the more reason for the central bank to stick to its neutral policy stance for longer, Ng says.