In normally placid Singapore, 2023 witnessed the political succession entering a critical phase with a more definitive timeline announced amid political controversies and scandals involving the ruling and leading opposition party capturing the attention of Singaporeans. The government's plans for a revitalized social compact were also unveiled after more than a year of consultations and engagements with Singaporeans under the auspices of the Forward Singapore exercise. The economy still awaits the strong post-pandemic recovery—it grew by 1.1 per cent, against the GDP growth forecast of 0.5 to 2.5 per cent. Coming on the back of the pandemic, making sense of the continuing uncertainty was not only challenging but also demanded a steely resolve from everyone to keep spirits up.

Watchful Waiting for Post-pandemic Economic Recovery

The International Monetary Fund had forecasted that a third of the world economy would be in recession in 2023, with the United States, European Union and China all slowing down simultaneously. Multiple global crises have confronted the world simultaneously on an almost unprecedented scale since 2022, including the Russian invasion of Ukraine, intense geopolitical rivalry between China and the United States, cross–Taiwan Straits tension, nuclear weapons on the Korean peninsula, and the lingering effects of the Covid-19 pandemic.

Domestically, the economy was a key concern, with inflation and the cost of living being top of the mind and creating uncertainty and anxiety for workers, consumers and businesses alike, especially when the inflation rate surpasses wage growth. With reduced real purchasing power, consumers tend to spend less, affecting business outlook, spending and investments. In turn, job insecurity and uncertainty among workers regarding whether salaries would remain stagnant or even be cut are generated. It's a vicious cycle that economic uncertainty drives, and which necessitated the government to provide ongoing assurance.

In 2023, the government rolled out a slew of measures such as various rebates, vouchers, subsidies, Medisave top-ups, and even cash payouts throughout the year, with low-income families receiving subsidies almost every month. The bulk of these came under the SG$8 billion Assurance Package to cover food and groceries, utilities and healthcare to partly manage the Goods and Services Tax (GST) increase, from 7 to 8 per cent effective 1 January 2023, with another 1 percentage point increase in 2024. As an economy dependent on export and investment, Singapore is bound to be affected by global economic storms. But the GST hike bore the brunt of the blame for the inflationary prices even as the rationale for the two-phased GST increase had been regularly explained. In part, it may indicate that Singaporeans still lack a competent understanding that being plugged into the international economic grid means Singapore is not spared from the vicissitudes of its external environment.