Singapore yesterday said that its economy would probably expand 4 to 6 percent next year amid a global recovery from the worst of the COVID-19 pandemic, and as travel restrictions and local safety measures are eased.
The city-state also narrowed its forecast for this year’s contraction, the Singaporean Ministry of Trade and Industry said in a statement, highlighting an improved outlook for manufacturing, driven primarily by electronics.
“On balance, given the improved growth outlook for key external economies, as well as a further easing of global travel restrictions and domestic public health measures that is expected in the year ahead, the Singapore economy is projected to return to growth in 2021,” the ministry said.
Photo: AFP
Singapore’s revised forecast comes as breakthroughs in vaccine developments raise hopes the pandemic can be contained.
Risks remain though, including fresh lockdown measures and premature withdrawal of policy support.
Easing travel restrictions also would not be straightforward, most recently seen as rising virus cases in Hong Kong delayed the start of a much-anticipated travel bubble between the two Asian financial hubs.
Singapore’s recovery depends greatly on factors outside its control, including the evolving US-China relationship, recurring waves of virus infection, and vaccine developments, Singaporean Minister of Trade and Industry Chan Chun Sing (陳振聲) said in a briefing after the release.
“The path forward lies in greater interdependence, rather than independence or autarky,” he said of relations between the world’s two largest economies. “We do not yet know how the new US administration will approach its relations with China. But we hope both sides will dial down tensions, and return to a more open and inclusive global economic order.”
Chan also cautioned that the excitement over vaccine developments might be misplaced, as “it will not be the quick fix that many expect it to be” with the manufacturing, distribution and application taking “many months, if not years.”
Edward Robinson, deputy managing director and chief economist at the Monetary Authority of Singapore (MAS), said that monetary policy remains appropriate at this time and that he expected the MAS would meet again as scheduled in April next year.
“There’s a continuing support impulse” from monetary and fiscal policy flowing through the economy, he said.
For this year, the ministry revised its outlook to a contraction of 6 to 6.5 percent, narrower than the decline of 5 to 7 percent forecast earlier.
It also said the economy shrank less than previously estimated in the three months through September.
GDP declined 5.8 percent in the third quarter of this year from a year earlier, according to final estimates released by the ministry.
On a quarterly basis, the economy grew a non-annualized 9.2 percent from the previous three months.
The data follow the second quarter’s 13.3 percent plunge from the same period last year, which marked a record in data going back to 1990.
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