Singaporean consumers are showing increased optimism about both the local economy and their personal finances, despite ongoing concerns about inflation and gaps in financial preparedness among younger people, according to UOB’s ASEAN Consumer Sentiment Study (ACSS) 2024.
The study reveals that nearly 70% of Singapore respondents (68%) are positive about the current economic environment, marking a significant 20-percentage-point increase from last year. This optimism surpasses the regional average by 14 percentage points.
While persistent inflation remains a top concern for ASEAN consumers, Singaporeans’ worry about financial issues has notably decreased this year. This decline likely reflects the effectiveness of government measures, such as the Assurance Package, CDC voucher schemes, and GST vouchers, which aim to support the local economy amid global economic challenges.
However, the ACSS 2024 also highlights that more than 25% of youths aged 18 to 25 fall short of the financial preparedness guidelines set by the Monetary Authority of Singapore (MAS) and the financial industry’s Basic Financial Planning Guide. This suggests a need for enhanced efforts to improve financial literacy among younger generations.
Ms. Jacquelyn Tan, Head of Group Personal Financial Services at UOB, commented, “It’s encouraging to see improved consumer sentiment in Singapore this year, indicating our resilience through economic uncertainty. Our youth are particularly optimistic about their financial futures, a sentiment we value highly. Nonetheless, the study underscores the need for better financial preparedness among young people. While they are taking positive steps like saving emergency funds and investing for the future, there is a clear need for more support in areas such as insurance coverage and legacy planning. We are committed to helping our young customers achieve their desired lifestyles while building financial security.”
In Singapore, fears of a recession have eased, with expectations of a major recession in the coming year decreasing by 10 percentage points compared to last year. Singaporean consumers are now 12 percentage points less likely than their regional counterparts to anticipate a major recession in the near term.
Additionally, 78% of Singapore consumers are confident about their financial outlook for the next year, up 8 percentage points from last year. Generations Z and Y are the most optimistic, with 88% and 81% respectively, while Generation X has seen the most significant increase in optimism, rising by 14 percentage points to 73%. Baby Boomers, however, remain the least optimistic, with only 54% expressing confidence.
Despite the broader regional concern about inflation (63% of ASEAN respondents), Singaporeans are relatively less worried. Concern over rising inflation among Singaporeans has dropped 16 percentage points to 55%, with concerns about increased household expenses and declining savings also decreasing by 12 percentage points to 52% and 47% respectively.
Government support measures in the Singapore Budget 2024, such as additional CDC vouchers and a personal income tax rebate, have alleviated cost-of-living concerns. The easing of inflationary pressures and a strong Singapore dollar have further supported local consumers’ purchasing power.
In terms of spending, Singaporeans have increased their expenditure on utility bills, daily commuting, and child education. However, the rise in spending on utility bills and household groceries has slowed. Notably, Singaporeans are spending more on experiential activities such as vacations, fine dining, and entertainment events compared to their regional peers.
