Despite Singapore’s economic boom in recent years, there are some macroeconomic risks which could see it face an economic crisis. According to the Ministry of trade and industry, in 2017 there was an economic growth of 1.8 % which was the lowest experience since 2009 when there was a financial crisis in the country.
Due to the influx of many labourers in Singapore, there has been a low skilled workforce. Many companies have established their presence in the country. Therefore, demanding a massive workforce from other nations due to the low population in the country. In the previous years, the government decided to control the job seekers from other nations demanding only skilled personnel to come to their country. This led to a mass layoffs and vetting of all people coming to seek employment in the country. Therefore, forced many companies to shut down businesses to close and set up the industries in other Asian countries. That, therefore, led to retrenchments and pulling out of businesses that heaving assisted in economic growth.
Poor economic planning
Over the recent past, Singapore has had poor financial planning which means that their economic policies do not support the country’s growth rather it is derailing it. Therefore, it important that the state comes up with strong monetary and fiscal policies to accelerate its economic growth.
Encouraging more imports than exports
For a very long time, Singapore has concentrated more on foreigners rather than both the foreigners and locals. That means that they support more foreign countries rather than the local companies thus failing to create incentives for the local businesses. Local countries can cause the economy to grow if given some special tax rates for them to be motivated. This makes them produce more goods and services and even export some. Therefore, generating more revenue for the country thereby increasing the Gross Domestic Product.
Low financial strength in the U.S and China
When there is a financial crisis in China and the U.S, the dollar strength is going to decrease. Thus will have a significant impact on Singapore’s dollar which will decrease because of the loss of purchasing power. This will also happen because many investors are from the U.S and they are doing their business in Singapore.
If the above factors are averting, then an economic crisis in Singapore will be avoided.
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