Tackling inflation and economic challenges will define Lawrence Wong’s leadership transition.
SINGAPORE: As Deputy Prime Minister Lawrence Wong prepares to take on the role of Singapore’s Prime Minister, addressing the rising cost of living is expected to be his top priority. Analysts and economists emphasize that tackling inflation will be crucial in maintaining public trust and economic stability.
A Bloomberg survey of 12 economists found that nine identified inflation as the most pressing issue for Singaporeans, reinforcing concerns about the rising cost of living. Despite efforts by the Monetary Authority of Singapore (MAS) to manage core inflation through tight monetary policies, February’s core inflation rate climbed to 3.6%, surpassing the 2024 forecast of 2.5%-3.5%.
MAS projects that inflation will remain high in the first half of the year before tapering off toward the fourth quarter, coinciding with the next general elections.
Balancing Domestic and Global Challenges
Economists note that the government has introduced measures to mitigate the effects of inflation, including financial assistance for households. However, the challenge lies in balancing these domestic concerns with external economic pressures.
A strong Singapore dollar, while curbing imported inflation, has impacted export competitiveness. Non-oil domestic exports have declined in two of the first three months of the year, reflecting vulnerabilities in trade—a critical component of Singapore’s economy.
Additionally, Singapore’s diplomatic relationships with major economies like the United States and China will require careful navigation. Strengthening these ties is viewed as vital to enhancing trade opportunities and sustaining the nation’s economic resilience.
Managing Labour and Leadership Continuity
Another key challenge for Wong’s administration will be balancing local workforce opportunities with foreign labour policies. Singapore’s reliance on global talent has fueled economic growth but remains a sensitive issue among locals.
Despite these hurdles, survey respondents expressed confidence in Singapore’s policy stability, citing the seamless and anticipated nature of the leadership transition. The focus on continuity and prudent economic management is expected to underpin Wong’s approach as he steps into this pivotal role.
