Christmas day - a day with special significance for Christians around the world. May they find peace of minds and spirits as they celebrate this day. For the rest of the consumers, hopefully responsible consuming are taking place!
"Risk to S'pore economy 'from within' - The Straits Times Dec 25, 2014
"Risk to S'pore economy 'from within' - The Straits Times Dec 25, 2014
External factors such as the recent oil price slump have grabbed attention of late.
But the biggest risk to Singapore's economy next year could still be its domestic restructuring efforts, experts said at a recent Straits Times roundtable.
Cheaper oil prices could boost consumer spending and lower operating costs for firms in industries such as transport, but the oil and gas sector will be hit, they noted.
The housing slowdown in Singapore caused by tight loan curbs may also drag down the economy next year unless policymakers relax some of the property market cooling measures, the experts added.
Bank of America Merrill Lynch economist Chua Hak Bin said at the discussion that the biggest risk to the local economy next year was likely to be the manpower crunch sparked by Singapore's move to rely less on foreign labour.
Companies may have to fire some people over the next several months in order to keep below their foreign manpower quotas and avoid paying high levies for employing foreign staff, he said.
"They could also hire, but with the tight labour market, it will be a struggle. So we still have very tight constraints that will limit Singapore's growth potential."
Veteran investor Mano Sabnani agreed, saying that the local economy would be "OK but not something to shout about" next year.
Calling the domestic restructuring a "self-imposed constraint on growth", he said that the productivity boosts which the Government is aiming for have been "slow to come".
The experts also pointed to the ailing property sector as a source of weakness for the local economy next year. A softening real estate market could also hurt the construction industry and other related sectors, they noted.
Phillip Futures investment analyst Howie Lee said the property downturn may also damage the overall stock market. "When the property sector is down, there aren't much funds for investors to put into stocks," he said.
Investors should also watch out for major external risks to Singapore's economy, with the biggest being the eventual interest rate hike by the United States Federal Reserve, he said.
"If you take a look around our region, Indonesia is thinking of cutting interest rates, Thailand is, Malaysia is. Only Singapore will have to raise rates in tandem with the US and that poses a serious risk to growth," he said."
I should not be commenting about this 'risk' thingy on Christmas day but hey, life goes on 365 days a year!
Lessons for me are:
1. economy goes up and down and round and round. It is normal. In fact, the ups and downs should be very violent IF pure market principles are allowed to work their magic! e.g. when property prices go up, more developers rush in and build to the point of over-supply and then prices will drop until the supply matches demand again! Alas, this cycle was never really allowed to go through its natural course due to intervention by human being, and in most cases, government!;
2. the economic activities discussed by the round table experts reported here are NOT those that touched physical goods type like stock market and property market. Honestly, if a nation's progress can be based on the full development of real estate, that will be easy. Unfortunately, building and having high priced properties do not do much for most ordinary people who need a sustainable job and make a living. Of course, things can be different if we drill deeper into: public and private residential property market vs. industrial vs. commercial, etc we will find the industrial and commercial ones have a bigger impact on the economy due to creation of jobs, rental income, etc;
3. while most people know real estate development does not bring much technologies, it is a good sector to get easy GDP growth as it supposedly triggered a lot of related industries when one builds real estate. e.g. roads, bridges, MRT, amenity, food centres, shopping malls, hospitals, recreational spaces, steels, cements, sands, etc... The challenge is: sustainability!
Merry Christmas and stay sober as a lot need to be worked on still ...
But the biggest risk to Singapore's economy next year could still be its domestic restructuring efforts, experts said at a recent Straits Times roundtable.
Cheaper oil prices could boost consumer spending and lower operating costs for firms in industries such as transport, but the oil and gas sector will be hit, they noted.
The housing slowdown in Singapore caused by tight loan curbs may also drag down the economy next year unless policymakers relax some of the property market cooling measures, the experts added.
Bank of America Merrill Lynch economist Chua Hak Bin said at the discussion that the biggest risk to the local economy next year was likely to be the manpower crunch sparked by Singapore's move to rely less on foreign labour.
Companies may have to fire some people over the next several months in order to keep below their foreign manpower quotas and avoid paying high levies for employing foreign staff, he said.
"They could also hire, but with the tight labour market, it will be a struggle. So we still have very tight constraints that will limit Singapore's growth potential."
Veteran investor Mano Sabnani agreed, saying that the local economy would be "OK but not something to shout about" next year.
Calling the domestic restructuring a "self-imposed constraint on growth", he said that the productivity boosts which the Government is aiming for have been "slow to come".
The experts also pointed to the ailing property sector as a source of weakness for the local economy next year. A softening real estate market could also hurt the construction industry and other related sectors, they noted.
Phillip Futures investment analyst Howie Lee said the property downturn may also damage the overall stock market. "When the property sector is down, there aren't much funds for investors to put into stocks," he said.
Investors should also watch out for major external risks to Singapore's economy, with the biggest being the eventual interest rate hike by the United States Federal Reserve, he said.
"If you take a look around our region, Indonesia is thinking of cutting interest rates, Thailand is, Malaysia is. Only Singapore will have to raise rates in tandem with the US and that poses a serious risk to growth," he said."
I should not be commenting about this 'risk' thingy on Christmas day but hey, life goes on 365 days a year!
Lessons for me are:
1. economy goes up and down and round and round. It is normal. In fact, the ups and downs should be very violent IF pure market principles are allowed to work their magic! e.g. when property prices go up, more developers rush in and build to the point of over-supply and then prices will drop until the supply matches demand again! Alas, this cycle was never really allowed to go through its natural course due to intervention by human being, and in most cases, government!;
2. the economic activities discussed by the round table experts reported here are NOT those that touched physical goods type like stock market and property market. Honestly, if a nation's progress can be based on the full development of real estate, that will be easy. Unfortunately, building and having high priced properties do not do much for most ordinary people who need a sustainable job and make a living. Of course, things can be different if we drill deeper into: public and private residential property market vs. industrial vs. commercial, etc we will find the industrial and commercial ones have a bigger impact on the economy due to creation of jobs, rental income, etc;
3. while most people know real estate development does not bring much technologies, it is a good sector to get easy GDP growth as it supposedly triggered a lot of related industries when one builds real estate. e.g. roads, bridges, MRT, amenity, food centres, shopping malls, hospitals, recreational spaces, steels, cements, sands, etc... The challenge is: sustainability!
Merry Christmas and stay sober as a lot need to be worked on still ...
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