A strong SGD is one reason for the drop in exports as they become too expensive for foreigners. Key exports declined for the 12th straight month in September. While a tiny city-state like Singapore might not be seen as a major exporting country, the Republic was ranked among the top 10 in total exports in 2022. This is because exports are measured in dollar value instead of quantity, and Singapore relies on the exporting of high value-added products.
The decline in exports can lead to a cutback on production from Singapore businesses due to fewer orders being received. Local factories might be downsized as businesses hire fewer workers, which can lead to higher cyclical unemployment.
An increase in cyclical unemployment can further decrease consumer spending, and this downward spiral of low production and spending can hit growth further.