Inflation may dampen Singapore shoppers’ sentiment, but no major hit to growth: analysts

RISING prices may prompt Singapore households to cut back on spending, but the overall impact on private consumption and the economy is likely to be limited, analysts told The Business Times.

That’s as some watchers remain optimistic about consumer demand from inbound tourists, and note the outward-oriented nature of Singapore’s trade-reliant economy.

Views are mixed on the impact of soaring inflation on domestic demand. Among those who see it taking a toll is UOB senior economist Alvin Liew, who said the bank’s recent downgrade of Singapore’s gross domestic product (GDP) growth forecast for 2023 – from 3.5 per cent to 2 per cent – reflects an uncertain external outlook and takes into account the impact of inflation on domestic private consumption.