Lacklustre consumer confidence paints a bleak picture for Singapore

Domestic demand won't recover soon.

Escalating economic uncertainty is taking its toll on consumer confidence in Singapore, according to the latest ANZ-Roy Morgan Consumer Confidence Index.

Although the index inched up marginally to 125.2 points in November, the proportion of Singaporeans who are confident about the economic and financial outlook remains particularly low.

“We note that only 31% of respondents (up 4ppts m/m) believe that their families are better off financially than they were a year ago, and only 32% believe that their financial situation will improve over the next year,” said Glenn Maguire, ANZ Chief Economist for South Asia, ASEAN & Pacific.

Still, the fact that the economy escaped technical recession in Q3 as well as a slight adjustment to monetary policy settings in October probably saw local households enter November with a slightly more optimistic disposition.

“We would assess Singapore consumer confidence as edging sideways, albeit on the slightest of an improving trend, much like the economy itself,” Maguire said.

On the overall economy, Singaporeans are similarly more optimistic, but hardly sanguine. 52% of respondents believe the country’s prospects to remain ‘good’ over the next year. Over the five-year horizon, a slightly lower 48% are upbeat about the domestic economy.

"The consumer confidence survey continues to paint a picture of households being restrained by uncertainty and a lack of pervasive optimism on the macroeconomic outlook. It is highly unlikely that domestic demand, especially consumption, will emerge as an offset to a challenging external environment anytime soon,” Maguire noted.