Analysts watching the results of the General Election (GE) will see no significant change in Singapore’s economic model, according to Prime Minister Lee Hsien Loong.
He said that as the People’s Action Party (PAP) prepares the next government, market analysts can expect enough tinkering to affect business.
Despite low unemployment and record economic growth, the PAP still witnessed its popular votes fall, signifying that the fruits of growth have not been well distributed.
According to analysts Gillian Koh of the Lee Kuan Yew School of Public Policy and DBS Bank’s Irvin Seah, the government has paid even more attention to inclusive growth.
“With the average winning vote share for the ruling party having fallen significantly and the loss of a GRC (group representation constituency), it could mark a shift towards policies aimed at sustainable and inclusive growth, and away from headline growth per se,” said Mr. Seah in a report.
This means not just producing more jobs with higher salaries but also, focusing more on health care, education and public assistance systems. It will also mean even tighter control of the foreign worker’s inflow to provide Singaporeans more breathing space.
Ms. Koh believed that “there will be further impetus to examine the type of jobs, the wages paid, the number of locals in each sector that would be benefiting from each investment from abroad, as well as employment conditions and equal opportunities for all.”
With costs of living and inflation among the major concerns that emerged during the election period, UOB’s Jimmy Koh and Alvin Liew expects to revisit the minimum wage issue.
“On rising inflation, we believe the focus on rising costs of living will likely mean that the Singapore dollar policy is kept on an appreciating stance, although the bar for incremental tightening moves on top of the current status quo is still quite high,” said Tan Min Lan of UBS.
While the radical move to end foreign labour has been dismissed, market analysts still anticipate further streamlining of the foreign-worker rule, which DBS’s Mr. Seah believes could increase labour costs and slow growth in the near future.
Nomura’s Lim Jit Soon also expects moves to moderate prices of HDB resale flats to hit the condominium market and the larger residential property sector.
In addition, Mr. Lim and Citigroup’s Kit Wei Zheng expect tighter restrictions on the casinos.
To contact the journalist, you may send your message to editor@propertyguru.com.sg