SINGAPORE — In his New Year message, Prime Minister Lee Hsien Loong extended his wishes for good health and happiness to Singaporeans in 2023, while a
SINGAPORE — In his New Year message, Prime Minister Lee Hsien Loong extended his wishes for good health and happiness to Singaporeans in 2023, while also cautioning about “uncertainties ahead” due to the “troubled” global outlook.
“Our economy will be affected,” he stated on Dec 31, explaining that the Ministry of Trade and Industry anticipates slower growth in 2023, with projections between 0.5 and 2.5 per cent.
Despite this caution, PM Lee noted that Singapore had “a lot to be thankful for in 2022.” He highlighted how the nation has resumed normalcy nearly three years after the onset of the Covid-19 pandemic. “We held our first full-scale National Day Parade since the pandemic. Singaporeans can again celebrate our festivals and reunite with family and friends at home and abroad,” he said, while encouraging continued vigilance with vaccinations.
However, he pointed out that Singapore’s economy, being highly dependent on trade, is vulnerable to external uncertainties. “The Russia-Ukraine conflict continues, with no good outcome in sight. US-China tensions are likely to persist. How quickly China recovers from COVID-19 remains to be seen, while the US and EU may well enter recession. Our economy will be affected,” he warned.
Bloomberg has projected that Singapore’s exports could decline by two per cent in a worst-case scenario, or remain stagnant at best. While China’s reopening, as Singapore’s top trading partner, could offer some relief to businesses, weaker demand from other markets might have a dampening effect.
Additionally, the US, Singapore’s third-largest trading partner, faces a grim economic outlook. The International Monetary Fund (IMF) reported that the US economy’s growth rate is expected to drop sharply, from six per cent in 2021 to a projected one per cent in 2023. Rising interest rates in the US, aimed at curbing inflation, may further weigh on global economic conditions.
Kay Daniel Neufeld, director and head of forecasting at the Center for Economics and Business Research, told CNN that it’s likely the global economy will face a recession in 2023 due to interest rate hikes in response to rising inflation.
PM Lee’s full New Year message can be read here.
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