Two-thirds of Singapore consumers expect an economic downturn over the next year: Survey

Slightly more than a quarter of Singaporeans polled had to set aside more money for everyday expenses. - PHOTO: ST FILE

SINGAPORE: Some 68 per cent of Singapore consumers foresee an economic downturn over the next six to 12 months, according to a survey released on Monday by UOB.

This is almost as high as the 70 per cent in UOB’s 2022 survey, showing that Singaporeans’ gloomy outlook remains relatively unchanged from last year.

The poll also showed that the cost of living remains Singaporeans’ top concern, more so than for consumers in the region, according to findings from the bank’s fourth edition of its annual Asean Consumer Sentiment Study.

It found that 71 per cent of Singapore respondents worry about rising inflation and 64 per cent fret about increased household expenses, higher than the Asean average of 63 per cent and 57 per cent respectively, though down from 2022.

Coming in third on Singaporeans’ list of concerns are long-term financial commitments (59 per cent), followed by a decline in savings or wealth holdings (also 59 per cent).

The 2023 survey was conducted in June and polled 3,400 people, including 1,000 Singaporeans.

The rest came from the other Asean countries of Indonesia, Malaysia, Thailand and Vietnam.

For the first time, UOB partnered with global management consulting firm Boston Consulting Group on the study.

Notably, the survey found that slightly more than a quarter of Singaporeans polled (26 per cent) had to set aside more money for everyday expenses, compared with the 20 per cent who did so in 2022.

A breakdown of where spending increased showed utility bills as the top culprit, affecting 43 per cent of respondents, followed by groceries at 34 per cent, and transport at 32 per cent.

Singaporeans also forked out more to dine out and travel (24 per cent).

Commenting on the survey, Ms J. Teo, who works as an in-house legal counsel for a boutique asset management firm and has an eight-year-old daughter, said: “Inflation has definitely impacted my daily spending. A meal outside for one can cost up to $10, and $100 at the supermarket buys me so much less than before.”

For her family, the higher costs have been most acutely felt in utilities, food and petrol.

“I’m still saving the same amount every month but have to make adjustments such as dining out less and cutting unnecessary spending.

“The worry is saving the same amount monthly won’t be enough for retirement now,” she lamented.

Having to set aside more for daily expenses meant that less went into savings for 23 per cent of Singaporeans polled.

On the brighter side, like Ms Teo, nearly three in four of those surveyed were either saving the same amount as the year before or more.

Whether the result of being more financially savvy or having fewer financial commitments, Gen Z is Singapore’s most conservative demographic with 48 per cent planning to save more in 2023 compared with the national average of 35 per cent.

But they are also more keen to put their money to work, with 30 per cent prioritising investments versus the national average of 24 per cent.

The inability to save was the most worrying financial situation for Singaporeans surveyed.

Cited by 42 per cent of respondents, it topped the inability to plan ahead for retirement (37 per cent), afford essential items and maintain current lifestyles (both at 31 per cent).

Ms M. Lee, who works in a large foreign bank and has four children aged between 11 and 17, said: “I have not given retirement planning a thought as yet because I need to save for the kids’ tertiary education first.”

“With increasing tertiary fees and housing prices, I worry for my kids and how they’ll be able to achieve their aspirations in future,” she added.

UOB said that while inflation has dampened economic recovery hopes, there is optimism in some quarters.

It noted that consumers in three of the five Asean countries – Vietnam, Indonesia and Thailand – expect to be financially better off by June 2024.

“This resonates with UOB’s outlook for the second half of 2023, that sentiment is set to improve as regional interest rates stabilise and economic growth holds steady,” the bank added. - The Straits Times/ANN