Singapore to ‘avoid outright contraction’, post slower economic growth: PM Lee Hsien Loong
- In his annual May Day message, Lee said there is hope inflation will let up in the second half and that retrenchment numbers ‘remain manageable’
- Singapore’s economy expanded 3.6 per cent in 2022, slowing from the 8.9 per cent growth it recorded in 2021
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Singapore is expected to post slower economic growth this year but it “should avoid an outright contraction”, Prime Minister Lee Hsien Loong said on Sunday.
While the city state’s economic growth will slow, inflation may moderate in the second half of this year, Lee said in an emailed speech.
The Monetary Authority of Singapore said earlier this month that the nation’s economy will expand 0.5 per cent -2.5 per cent this year, even as it flagged the possibility of a recession in the US.
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“There is a risk of recessions in Western countries as central banks continue raising interest rates to dampen inflation,” said Lee. “We must respond to these broader trends by adapting to them, while doing all we can to buffer those adversely affected.”
Lee said retrenchment rates have remained “manageable” as the government rolls out policies to reskill its population in the expectation that emerging green industries and technologies like artificial intelligence will disrupt global economies.
The Southeast Asian city state’s economic performance is often seen as a barometer of the global environment because of its reliance on trade with the rest of the world.
The financial centre also has one of the busiest ports in the world which serves as a key link between Asia and the rest of the world.
But our external environment remains volatile, fraught with serious geopolitical tensions
“But our external environment remains volatile, fraught with serious geopolitical tensions,” Lee warned, pointing to the risk of recession in the West, where interest rates continue to be hiked to tame inflation.
“The multilateral trading system is being progressively undermined by growing nationalist and protectionist sentiments, affecting international trade and cooperation.”
Singapore’s economy expanded 3.6 per cent in 2022, slowing from the 8.9 per cent growth in 2021.
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The city state will have to adapt to the economic disruption of emerging industries and technologies, Lee added.
“Singapore’s survival depends on us staying open and doing business with the world,” he said.
“This means continually transforming our industries, enhancing existing capabilities and building new ones as we move into growth markets.”
Additional reporting by Bloomberg
