In his New Year address, Prime Minister Lee Hsien Loong highlights the uncertain global economic landscape impacting Singapore’s growth prospects.
SINGAPORE — In his New Year message, Prime Minister Lee Hsien Loong extended his wishes for good health and happiness to Singaporeans in 2023 while cautioning about the “uncertainties ahead” stemming from a “troubled” global economic outlook.
“Our economy will be impacted,” he stated on Dec 31, noting that the Ministry of Trade and Industry “anticipates slower growth in 2023 – ranging from 0.5 to 2.5 percent.”
Despite these challenges, he emphasized that there is “much to be grateful for in 2022,” highlighting that nearly three years after the onset of the Covid-19 pandemic, “things are returning to normal.”
“We successfully hosted our first full-scale National Day Parade since the pandemic. Singaporeans can once again celebrate our festivals and reunite with family and friends both locally and abroad,” he added, while still urging everyone to stay updated with their vaccinations.
However, due to Singapore’s dependence on trade, global uncertainties will inevitably influence the nation’s economy.
“The ongoing Russia-Ukraine conflict shows no favorable resolution in sight, and US-China tensions are likely to endure. The speed of China’s recovery from COVID-19 remains uncertain, while both the US and EU may face recession. Our economy will feel the effects,” he noted.
Exports are predicted to decrease by two percent this year under a worst-case scenario, with zero growth anticipated in the best-case scenario, as reported by Bloomberg.
While the reopening of China—Singapore’s primary trading partner—may provide a boost to businesses, diminished demand from other markets could have adverse effects. The US, with its bleak economic outlook, ranks as Singapore’s third-largest trading partner.
The International Monetary Fund (IMF) has projected a sharp decline in the US economy’s growth, forecasting a drop from 6 percent in 2021 to a mere 1 percent in 2023.
Furthermore, rising interest rates in the US are a response to escalating inflation.
Kay Daniel Neufeld, director and head of forecasting at the Center for Economics and Business Research, informed CNN that “the world economy is likely to encounter a recession next year due to the increases in interest rates in response to higher inflation.”
PM Lee’s complete New Year’s message can be accessed here.
