‘Support must begin before workers are affected’: Gan Kim Yong says jobs at centre of Singapore’s economic strategy

Singapore's economy is projected to continue strong growth this year, but the benefits of this growth may not be felt equally by all workers. Experts suggest this is due to a phenomenon known as "K-shaped growth", where certain industries, particularly those related to AI and technology, are experiencing rapid expansion while other sectors lag behind.

Maybank Securities Singapore economist Brian Lee pointed out that while the headline growth has been robust, the underlying growth is uneven. The Ministry of Trade and Industry (MTI) recently raised Singapore's growth forecast for 2026 to 4.5% to 5.5%, citing better-than-expected performance in the first half of the year and a positive outlook for the remainder of the year.

This optimism has been fueled by strong performance in manufacturing, wholesale trade, and finance and insurance sectors, especially the electronics and precision engineering clusters of manufacturing, as well as machinery, equipment, and supplies in wholesale trade, driven by robust global AI-related demand.

However, the picture is quite different for the domestic and consumer-facing parts of the economy. Retail and food and beverage (F&B) sectors are grappling with high rental and labor costs, while cautious consumer spending and a strong Singapore dollar are driving more Singaporeans to spend abroad. ANZ Asia research head Khoon Goh noted that the K-shaped growth is most apparent in Singapore's exports, with electronic non-oil domestic exports rising 112% year-on-year in July, while non-electronics exports fell 2.3% over the same period.

This disparity is concerning because the sectors driving the most growth are not the ones that employ the most workers. Khoon Goh pointed out that sectors such as retail, hospitality, and non-financial services account for only 24% of the economy but employ around half of the workforce. Thus, there is a "feeling on the ground" that the strong headline GDP growth is not benefiting workers, especially as AI disrupts the labor market, forcing businesses to restructure to remain relevant.