Singapore's economy contracted more than expected in the last quarter, compared with the previous year, underscoring the weakening outlook for Asian nations amid sluggish global growth.
There are many global economic hot spots that could contribute to the next downturn.
In Europe, there is the spectre of a Greek default, with a new bailout package still pending approval.
Other European Union member states are also indebted and there will be continued anxiety over whether these countries can repay their debt.
Bonds belonging to some European nations, including Germany, have lost their value over the last few months, even though they have started another round of quantitative easing.
In the United States, the Federal Reserve is looking at raising interest rates, and that will have a boomerang effect on the countries in the emerging markets.
The recent stock market rout in China has resulted in its government stepping in to bolster the market with funds and Chinese companies stopping trade in the Chinese market in an unprecedented way.
Commodity prices continue to be depressed due to a slowdown in manufacturing worldwide.
The world is in a deflationary environment, which has sent gold and oil prices plunging, and which may fall even more.
Singapore's manufacturing sector has been hit by the global slowdown and its current projected growth has been lowered to 2 per cent to 4 per cent by analysts.
Although the Government has stated that Singapore is not in a deflationary phase, there is a risk that growth will be stagnant while inflation is negative.
I believe this is an important issue for our upcoming election, and the Government will need to be proactive and plan for all contingencies in view of the global risks that could cause a worldwide economic downturn similar to the 2008 financial crisis.
It is important to take a look at your savings, spending habits, debt and investments.
Be balanced and spend on what you need.
Ensure that you have sufficient cash to tide you over should you need to find another job.
For debt, interest rates are projected to rise this year, so it is important not to take on too much debt. Also, be more risk averse in your investment portfolio.
Let us all stay mindful of the next possible downturn and be prepared for what may come.
Wong Shih Shen