Fewer Singaporeans than a year ago are entering the new year believing it will be better than 2022, with inflation the key worry, according to a new survey on the outlook for 2023.

A total of 64 per cent of Singaporeans feel that 2023 will be a better year for them than 2022, which is a 15 per cent drop from the sentiment measured a year ago, the polling company Ipsos said in its Predictions for 2023 survey.

The results are based on a survey of about 500 Singaporean respondents who were considered to be more urban, more educated, and/or more affluent than the general population.

The Singaporeans polled from Oct 21 to Nov 4 are less optimistic about the economy in 2023, with 87 per cent of people saying that prices are likely to increase faster than their incomes.

THE BIG PICTURE

While the pandemic has receded, Singaporeans have been feeling the pinch of inflation, from higher bank interest rates for mortgages and loans to rising prices.

A total of 83 per cent of Singaporeans expect higher interest rates in 2023

The findings also show that 71 per cent of Singaporeans expect higher unemployment rates in 2023

But Singaporeans still have trust in the economic stability of the country, with only 35 per cent of Singaporeans saying that they expect an emergency bailout from the International Monetary Fund (IMF) next year

This is compared to 46 per cent of citizens from other surveyed countries who expect an IMF emergency bailout for their respective countries

While real median income growth rose 2.1 per cent year-on-year for the year ending June 2022, this is still slower compared to pre-pandemic years, according to the Ministry of Manpower’s (MOM) annual Labour Force in Singapore report.

The average real median income growth each year before Covid-19 was 3.8 per cent from 2014 to 2019.

At the same time, according to a policy statement by the Monetary Authority of Singapore (MAS) in October 2022, the MAS Core inflation rate year-on-year was 3.8 per cent in the second quarter of 2022, and rose to 4.9 per cent in the July-August period. This excludes private road transport and accommodation costs.

The year-on-year core inflation hit 5.3 per cent in September, before easing slightly to 5.1 per cent in October, the first drop in eight months. 

EXPERTS WEIGH IN

The survey findings and the respondents' perceptions of the economic outlook are based on the reality of slow income growth, said CIMB Private Banking economist Song Seng Wun.

“The reality is that at the moment this year, nominal wage growth is lagging behind inflation. Inflation is growing at a faster rate than wage growth," he told TODAY.

"People can feel the gap between how much they are paying for travel, food, mortgage, and other items, and their wages which have not grown at the same pace as the rising cost of living.”

Singaporeans’ perceptions may also be due to the increase in prices for everyday items, which are more visible, said associate professor Walter Theseira from the Singapore University of Social Sciences.

“Data from MOM shows that there was actually good real income growth for most Singaporeans, but Singaporeans may not think that happened, possibly because prices for things they were more concerned about, such as some grocery items, rose more visibly or to a greater extent,” Assoc Prof Theseira added.

"So, they perceive that inflation generally rose faster than income."

POST-PANDEMIC RECOVERY

Singaporeans are more positive about post-pandemic recovery, the survey also shows, with 63 per cent of respondents anticipating no further Covid-19 lockdowns.

Responding to TODAY's queries on these findings, infectious disease expert Hsu Li Yang said that the likelihood of a Covid-19 lockdown in 2023 is very low.

 “Virtually the whole population has been vaccinated and/or infected, so the health impact is markedly different compared to 2020, and even 2021, though there will still be severe illness and deaths from Covid-19 in the way people have died and continue to die from the influenza,” said Assoc Prof Hsu, who is from the Saw Swee Hock School of Public Health.

Dr Leong Hoe Nam, a Mount Elizabeth Novena Hospital infectious disease specialist, also attributed the positive post-pandemic perception to the availability and high uptake of vaccines.

“There is a lot of confidence among Singaporeans with our post-pandemic recovery efforts, due to the availability of vaccinations and its uptake, including the second booster shot,” he said.

Dr Paul Tambyah, president of the Asia Pacific Society of Clinical Microbiology and Infection, said he agreed with the majority of Singaporeans’ views on no lockdowns in the future.

“The reason is that we have seen over the last few months that lifting restrictions as we did in August 2022 had no impact on case numbers, and tightening as we did at the end of 2021 could not prevent the Omicron surges," he said.

"Furthermore, our populations are highly vaccinated which makes the currently circulating variants have very low virulence… so it would be really hard to justify a lockdown.”

Source:
courtesy of TODAY

by NUR HIKMAH MD ALI

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