Yesterday, I read from Channel News Asia that Singapore’s Gross Domestic Product (GDP) barely grew by 0.5% compared with the same period last year, down from 9.3% growth achieved in Q1. In fact, the economy contracted 7.8% compared with Q1. This prompted many economists to warn of a bumpy ride for the rest of the year.
I remembered in Q4 last year with the release of the second economic package in US, there were many news reports predicting that this package would be consumed by the end of the first half of this year and forecasting a global economic slowdown into the second half of this year. At that time, the sovereign debts crisis had just begun. Least did we expect the earthquake to hit hard on New Zealand to be followed by the tsunami on Japan in Q1 this year. Recently, I met an IT consultant from Auckland in a technology event in Singapore. He told me that it would take up to 10 year to rebuild the city of Christchurch. The deadly tsunamic in Japan put the country into economic crisis again. The global supply chain suffered immediately. Japanese companies in Singapore and elsewhere will surely re-focused their resources to rebuild their country and repair their economy. This will take many years before Japan recovers from this crisis. Japan will come out stronger ultimately!
The crisis in euro zone continues to worsen with Greece, Ireland and Portugal struggling not to default on their debts. Spain and (hhmm…) Italy may set off more contagion shocks. All austerity measures that these European countries adopted will take some time to see results if ever – this could mean a protracted bumpy road ahead.
The US economy was reported ailing in recent months with lower employment and stagnated consumer spending. They are also facing a possible debt default soon. The Straits Times reported today of stormy crisis debt talks between President Obama and top Republicans turned acrimonious, increasing doubts that both sides could reach a deal to avert a potentially disastrous US debt default. A US default will surely cause a financial tsunami again.
So what was foretold in Q4 last year and taking stocks of current situation seem to point towards an increasingly gloomly second half of this year and into the beginning of next year. Looking forward, I wish inflation will ease and the protracted slowdown will not result in job loss. Job seekers are advised not to be overly adventurous and should exercise due care when evaluating a career move.