The first forecast is from Dr. Chua Hak Bin, Citigroup’s head of equity research. According to him, the key of 2009 is Singapore’s budget, which will save jobs and eventually lure global firms. Furthermore, he explains:
“Two themes will dominate the first half of next year – recession and Government. Singapore may be headed for the worst recession, in terms of both duration and depth, in its history. Growth in the first quarter year-on-year could be worse than the sharpest contraction previously seen of 6.5 per cent in 2001.”
However, he further explained, “The Government will have to play a more active and decisive role, given that both exports and private investments are collapsing. The Jan 22 Budget will be key. Not only does it have to help cushion the impact of the recession on ordinary Singaporeans, but it must also find ways to save jobs in the face of worldwide consolidation as companies are forced to decide on where to shut down, where to cut and where to stay.”
Finally, he concluded, “The Budget will also be key in making the case on why global companies and financial institutions need to stay in Singapore, and not Hong Kong or any other city. In tough times, small differences in tax treatment, operational costs and wage costs may tip the balance on location decisions and jobs.”
The second forecast for 2009 is from HSBC Senior Asian Economist Robert Prior-Wandesforde. ,. According to him, “…short-term prospects are not good. [But] After an extraordinary period of strength, the labour market is likely to buckle as well. [But] there are reasons for optimism, such as the positive effects stemming from the huge Obama fiscal package.”
He also added, “Meanwhile, Singapore’s Budget will have a range of goodies, both for households and companies, as the Government attempts to stimulate the economy. Singapore is also well-placed to benefit from what is already the biggest drop in commodity prices the world has seen in at least 50 years. This will help support real personal incomes and profits.”
“In the meantime, it seems wise to keep a cushion of savings and look forward to brighter times,” he concluded more positively.
Wong Sui Jau, general manager of online unit trust firm, Fundsupermart, gave the third forecast for 2009. Like Robert Prior-Wandesforde, Wong is positive. He says, “I’m actually quite positive about 2009 because 2008 was so bad. We have more or less bottomed out in my opinion. Everything of an investible nature has already fallen to rock-bottom prices, markets have fallen to very cheap levels. You would need bad news of an unprecedented nature to faze investors.”
Tulika Tripathi, Michael Page International human resource firm director, also gave her forecast for 2009, saying “2009 is going to be as bad as it already is. We are already in an economic contraction, and December saw the highest number of job cuts in the last 26 years. Multinationals that drive a lot of Singapore’s employment have cut back staff because they want to start off 2009 with better cash flow. January will be difficult. General level of layoffs are at an all-time high and I wouldn’t be surprised if there were more in January and February, across more sectors. The downturn may seep into certain sectors that may not have felt its full impact yet.”
Finally, OCBC Bank head of group wealth management, Nicholas Tan,gave his forecast as well. He says, “We may bottom out in the later part of 2009 or 2010, but even if we do, it is highly unlikely that we will see a recovery to old levels very early on. The key for investors next year will be patience. There will be a lot of false dawns. Things will look like they have turned the corner and then suddenly you get a piece of bad news. There are lots of opportunities in terms of what you can do with your money, but the biggest danger is you end up being locked up for a long time. A lot depends on how quickly the credit-creation cycle can come back because that is where the heart of the whole crisis is right now.”