When it comes to the economy, Singapore is not out of the woods yet. The Monetary Authority of Singapore (MAS) is unlikely to to tighten monetary policies further. The central bank is wary of subdued inflationary pressures and softness in the local labour market and is unlikely to appreciate nor depreciate the Singapore dollar, opting to keep a neutral stance.
Although the country has experienced better growth numbers this year, the growth is only from pockets of Singapore economy and not the economy as a whole. Domestic consumption and investment remained weak.
In short, the labour market is not strong and the country is still not at optimal economic performance.
However, some economists are bullish about the short term future.
DBS economists released a note to announce that there would be a “pleasant surprise” of 4.8% year-on-year growth, up from 2.9% the previous quarter.
For the past few months, recruiters have highlighted weakness in the employment market, especially when it comes to foreign hires.
“There is a significant slowdown, there are many eager to come to Singapore to work but it is not easy to place them”, said Kathy Wei, a recruiter with a local employment agency. “There are many factors that contribute to this. Tightening labour policies, a weaker business environment, less aggressive expansion for example”.
This trend is expected to continue. Economists forecast a gradual upward slope in the labour market only in the first quarter of 2018.