Over two-thirds of Singapore consumers expect economic downturn amid rising inflation: UOB study
Goh Ruoxue
ABOUT two in three consumers in Singapore – or 68 per cent – foresee an economic downturn in the next six to 12 months, according to the findings of a new survey by UOB on Monday (Aug 21).
The number stands just a shade lower than the 70 per cent who expressed this sentiment in the same UOB survey in 2022.
Across five key markets in South-east Asia, 71 per cent of those surveyed said they expect to see a downturn within the coming year.
The fourth edition of the local bank’s Asean Consumer Sentiment Study was conducted from Jun 1 to Jun 26, and polled 3,400 people online from Singapore, Malaysia, Indonesia, Thailand and Vietnam.
This year, UOB partnered global management consulting firm Boston Consulting Group (BCG) for the first time to put together the annual study, which analyses consumer trends and sentiments in the region.
The latest survey found that rising inflation and increased household expenses constitute the two main worries at the forefront of Singaporeans’ minds.
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Some 71 per cent of Singapore consumers expressed concern about inflationary pressures, compared to the regional average of 63 per cent. About two-thirds, or 64 per cent, of those polled in Singapore fret over rising family expenditures, higher than the regional average of 57 per cent.
“Singapore is a developed economy that has not been traditionally a high-inflation environment, if you compare (it) with Indonesia or Vietnam or other places,” said BCG’s managing director Prashant Choudhary at a panel discussion on Monday.
“Consumers are used to seeing prices going up around here, but that was not the case in Singapore. For the first time, we are seeing that grow significantly, and that’s definitely playing a part (in affecting sentiments).”
The panel also featured UOB’s head of group personal financial services Jacquelyn Tan, Visa’s group country manager Tareq Muhmood, and co-founder of personal finance blog The Woke Salaryman He Ruiming.
The study found that against the backdrop of high inflation, Singaporeans worry most about their ability to save, plan ahead for retirement, and afford necessities. Their secondary worries include the ability to maintain their current lifestyles, care for their parents, and pay for their utilities.
“I think it’s not surprising to have a little bit of a downbeat in terms of consumer sentiments, especially when you see rising prices, inflationary pressures, and, of course, cost and expenses since the pandemic,” said Tan.
She added: “In the second half of this year, I think overall we do see inflation probably easing a little bit. Hopefully, there’s a little bit of cautionary optimism in terms of consumer sentiments that we see ahead, especially with rates as well as the economy (becoming) a bit more stable.”
The study also revealed that Gen Zs, classified as those who are 18 to 24 years old, formed the most conservative demographic in Singapore. Around 48 per cent of respondents said they will save more this year, compared to the national average of 35 per cent.
This set of results may appear surprising but it is understandable, said Tan.
“Younger Singaporeans are a little bit more conscious: more value conscious, conscious about savings, conscious about investing, and probably conscious about the future, especially in the event of rainy days,” she said.
Said He from The Woke Salaryman: “Against this backdrop of pessimism, it’s important to realise that in Singapore, we still have it relatively good, and it’s better not to lose hope. For the consumer, it’s about learning how to manage your expectations, living below your means, and (investing and thinking) long term so that you can have a better future.”
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