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Bad News: Storm clouds are gathering

Even as the surge subsides, other storm clouds are gathering at a rapid clip.

High core inflation of 5.1% for October will undoubtedly dampen spending demand.

Private sector economists have forecast that core inflation will come in at 4% next year and incorporates the 1% increase in the GST rate which takes effect from 1 January.

Growth forecasts for Singapore’s gross domestic product (GDP) have also been cut, with economists projecting an expansion of 1.8% in 2023.

This forecast may be reduced further should risk from geopolitical tensions, supply chain disruptions, and war worsen next year. Sad

There may even be a possibility that the economy may enter a recession, which would result in many people losing their jobs.

Coupled with surging interest rates as the US Federal Reserve aggressively raises its benchmark rate to combat inflation, it could set up a “perfect storm” of negatives that will severely curtail discretionary spending.

These headwinds could hit SIA as soon as early next year as the year-end travel season winds down.
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