Singapore: High wages flash recession warnings in Singapore

• Aug 22, 2016

Singapore: High wages flash recession warnings in Singapore

Monday, 22 August 2016 – SaladStop owner Adrien Desbaillets has eased off on expansion plans for his organic food chain in Singapore because high wages are pressuring profit margins at a time when the affluent city-state is grappling with low growth and slack global demand.

Instead Desbaillets is branching out in Manila, Jakarta and even in wealthy Tokyo in a worrying sign for Singapore’s small, open economy.

Indeed, while the city-state’s economy is expected to grow between 1%-2% for the year, analysts say the wage-cost pressures are flashing warnings of a recession.

At roughly 43% of gross domestic product – though below the 55% world average – wage costs in Singapore are now at levels which historically had preceded recessions in 1985, 1997 and 2001. Read More?