Global economy faces four key uncertainties
Published On: Tuesday, September 20, 2022 | By: Team KnowMyStock
The global economy faces mainly four key uncertainties including a downturn next year, according to economic experts in a signal that policymakers will be in firefighting mode for longer. They listed the severity of the downturn, inflation’s trajectory in the medium term, the impact of geopolitics on markets, and climate risk on portfolios as the main risks to the global outlook. Singapore, like many economies worldwide, is grappling with inflation that’s yet to peak and a tight labor market that still is creating headaches for businesses short on workers as they emerge from the pandemic. Medium-term inflation is likely to be higher for longer, rather than recent benign price gains, and the era of cheap money and cheap labor are most likely over, say experts.
Singapore has managed to keep a relatively steady pace of growth this year amid headwinds, with the median of 37 economists in a Bloomberg survey since late August projecting 3.6% growth for 2022 after almost 8% last year. That will be among the slowest pace of expansion in the Southeast Asian region.
At the same time, the heavily trade-reliant economy is vulnerable to a darkening global outlook, including significant impact from weakening in China, its No. 1 trading partner. The global race to higher interest rates provides additional pressure on the central bank to keep tightening, even as the local currency has suffered less than regional peers.
Tags: Global economy downturn inflation
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