This year has been a tough one for Singapore's economy, for reasons that were summed up in recent remarks made by the International Monetary Fund (IMF).
Early last month, IMF chief Christine Lagarde warned that the world economy may never revert to the pace of growth it enjoyed before the global financial crisis.
She flagged the risk of a "new mediocre", where worldwide growth stays low and uneven for a protracted period - hurting economies that rely on external demand, such as Singapore.
Two weeks later, the IMF sounded another alarm, cautioning that Singapore's policy of moderating foreign worker inflows could dampen the nation's potential growth and competitiveness. The resultant tighter labour supply, on top of an ageing population, would also likely push wages up more quickly than productivity, it added. Companies would pass on these higher costs by raising prices for consumers.
The IMF's observations pinpoint two main issues plaguing Singapore's economy: a global economy that has failed to get back on track post-crisis, and a productivity drive at home that has struggled to take flight.
While Singapore can do little about the former, it can step up efforts on the latter. This has become especially urgent as the double blow of flagging demand and supply constraints is starting to show up more clearly in growth and inflation data here.
Figures this month showed Singapore's economy grew just 1.2 per cent in the third quarter over the second. That marks three straight quarters where the economy has expanded 2 per cent or less over the preceding quarter - the longest period of such tepidity since the 2008 financial crisis.
As DBS economist David Carbon notes, these numbers imply that the state of the economy is actually "much weaker than the 2.5 to 3 per cent full-year average figure that everyone bandies about".
Mr Carbon is referring to official full-year growth forecasts, which tip the economy to grow a better-sounding 2.5 to 3.5 per cent both this year and next year. Most economists believe growth will come in at the poorer end of that range, at 3 per cent or lower.
This would be possible once growth in all four quarters is averaged out - but such a calculation "makes it plain how misleading" these full-year average figures can be in the face of weak quarterly growth, said Mr Carbon.
He estimates that, if no revisions are made to the growth numbers in the first three quarters, the economy would need to grow 6 per cent in the fourth quarter to reach 3 per cent full-year growth.
But even 3 per cent would be at the bottom of the range Singapore set its sights on after starting its restructuring drive in 2010.
At the time, such a target seemed achievable. From 2000 to 2009, Singapore's economy grew an average of 5.3 per cent a year, despite suffering through two recessions during the dot.com bust and global financial crisis.
Part of this was due to a generous foreign worker policy in the boom years of 2004 to 2007, allowing Singapore to capitalise on robust global demand that sent growth soaring nearly 9 per cent a year on average in that period.
Still, even after tightening the tap on foreign workers in recent years, the Government believed the economy could grow a "healthy" 3 to 5 per cent a year on average from 2010 if it managed to raise labour productivity by 2 to 3 per cent annually.
Of course, growth would vary each year depending on the global economic outlook, it said. But Singapore should do better than most advanced nations, which typically grew 2 to 3 per cent a year.
Four years on, these numbers are looking a bit outdated. Developed economies have grown below 2 per cent nearly every year since 2008 and are forecast to expand just 1.8 per cent this year.
Singapore's productivity, meanwhile, has moved along at the pace of a tired snail. Between 2011 and 2013, productivity gains have averaged 0.2 per cent a year; in the first two quarters of this year, productivity has fallen 0.3 per cent on average.
As the IMF has noted, the combined impact of these is not just lower growth, but higher prices.
The good news is that overall inflation has been coming down in recent months, largely due to government measures to temper soaring house and car prices.
But core inflation, which strips out accommodation and private transport costs and is a better gauge of daily expenses, will likely be 2 to 2.5 per cent this year and 2 to 3 per cent next year - nearly the same as economic growth.
In fact, the gap between economic growth and core inflation is now at its smallest since at least 1990, save for recession years.
This situation of low growth and elevated prices can create discomfort for workers and consumers. If inflation rises as much as or more than dollar wages, that means real salaries - adjusted for inflation - stay flat or even fall.
In recent years, incomes have managed to outpace overall inflation on average. But for that to continue, Singapore must position itself to maximise economic growth and temper price rises.
Against the current dismal global outlook, Singapore cannot rely on external demand alone to buoy its growth. And even when demand does pick up, the new manpower constraints here mean the economy cannot profit as quickly or as much from upswings in overseas markets as in the past.
The pressure in on for the 10- year productivity drive to succeed, so businesses can use technology, training and innovation to fulfil more orders, construct more buildings or engage in higher-value economic activities with fewer workers. This will require a stronger buy-in from companies. A recent survey found that of nearly 3,000 small and medium firms polled, only half were relooking their business models in the light of the ongoing restructuring.
If they don't get on board, the alternative is grim. As the IMF put it: a successful restructuring can set the stage for a new era of sustainable growth, albeit with some interim pain.
It left the next obvious part unsaid: If restructuring fails, the pain of lower growth and higher core inflation may be here to stay.
