Singapore’s GDP increases by 6.4%
Singapore’s Gross Domestic Product increased by 6.4%, and the Consumer Price Index increased by 2.9% compared to a year ago. Economists were expecting a 5.1% increase. The Consumer Price Index change is due to costlier fuel prices and an increase in the goods and services tax. Hence, inflation could be between 1.5% and 2% this year, and it may even go up to 3% next year. This was in a Bloomberg Report.
Some of the sectors that had done very well include:
- Construction Industry 15.5 percent
- Manufacturing Industry 12.3 percent
- Services 8.1 percent
The Singapore economy is at the risk of overheating due to inflation. Due to Singapore’s expansion, inflation and private home costs have increased tremendously. Despite the huge increase, prices do not appear to be falling anytime soon. This could mean that private property is getting out of rich for normal Singaporeans.
What does this mean for us? The interest rate your money is currently getting has to be higher than the inflation rate. If not, that means your money is depreciating, and what you have now will not be enough for the future. To beat this, your investment return must be higher than 2% in order to stay ahead.
What the Central Bank is doing is to let our currency appreciate, so that imports will be cheaper. For those who are dealing with forex, they need to take note of this. Already, the American dollar has fallen to new lows as compared to the Singapore dollar. It used to be as high as S$1.78 for US$1, but now, it only costs S$1.46 to buy an American dollar. It is also a good time to buy goods from US now, since it costs less than before. The only problem is the earnings I make in US dollars have fallen.
Sarah Tan - SingaporeProfit.com
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