Complete Property Market Updates of Singapore

May 12, 2008

Icpas members call inflation top worry

Filed under: General,Regulators,Singapore Economy — Propertymarketupdates @ 2:09 am

INFLATIONARY pressures are the top challenge for the Singapore economy in 2008, say accounting professionals, many of whom are fairly bearish about the outlook.

The 202 members of the Institute of Certified Public Accountants of Singapore (Icpas) who responded to a business confidence survey also picked the credit market turmoil, labour costs and labour supply issues as other top challenges.

About two-thirds of the respondents – most of whom are non-practising CPAs – reckon the Singapore economy would be ‘moderately’ affected by the credit market crisis and a ‘probable’ US recession, and 15 per cent say the impact would be ’substantial’. The remaining 20 per cent think the impact would be ’slight’. No one thought the Singapore economy would be unscathed.

The inaugural Icpas poll on members’ business sentiment was conducted in March, at possibly the height of market agitation over sub-prime and credit- related writedowns, credit infusions for US banks and US interest rate cuts. At the same time, the US dollar – and Asian stock markets – plunged, while oil prices soared.

Unsurprisingly then, perhaps, two-thirds of the CPA respondents are neutral or bearish about the Singapore economy. Most are less confident about the economic outlook compared to a quarter earlier.

Commenting on the results, Icpas vice-president Ernest Kan attributes the ‘lukewarm’ sentiment to the uncertainties and worries ahead, chiefly about inflation and the US downturn.

But sentiment across sectors varies, he notes.

‘Sectors like hotels and restaurants and construction are still expecting growth. These sectors are not as exposed to the US economy as sectors like manufacturing, wholesale and retail sectors, which are looking less upbeat,’ Dr Kan said.

Source : Business Times – 7 May 2008

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