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Singapore’s economy continues to show resilience

Singapore’s economy continues to recover steadily from a sharp contraction in 2020 on the back of effective pandemic containment measures, accelerated vaccination rollout, and extended policy support for affected businesses and households, revealed a report of the ASEAN+3 Macroeconomic Research Office (AMRO) on November 8.
Singapore’s economy continues to show resilience ảnh 1Singapore’s economy continues to recover steadily from a sharp contraction in 2020 (Photo: AFP/VNA)

Singapore (VNA) – Singapore’s economy continues to recover steadily from asharp contraction in 2020 on the back of effective pandemic containment measures,accelerated vaccination rollout, and extended policy support for affectedbusinesses and households, revealed a report of the ASEAN+3 MacroeconomicResearch Office (AMRO) on November 8.

Inthe 2021 Annual Consultation Report on Singapore, the AMRO said thegovernment’s roadmap to ensure safe reopening and support a transition to thenew COVID-19 endemic normal is crucial in securing Singapore’s economicrecovery in 2021 and beyond.

TheSingapore economy is forecast to grow by 6.3 percent in 2021 and 4 percent in2022, underpinned by the recovery in domestic economic activities and robustexports. However, the recovery in tourism-related sectors will remain slow dueto the continued restrictions on cross border travel reflecting the resurgenceof the pandemic and the slow pace of vaccination in many countries.

Meanwhile,Singapore’s inflation has picked up, in line with the rebound in oil prices andstrengthening economic activity. After a decline to minus 0.2 percent in 2020, bothheadline inflation and core inflation are expected to increase moderately in2021.

Inthe short term, key risks to growth are a resurgence of the COVID-19 pandemicand the resulting adverse effects on hard-hit businesses and households. Risingfinancial distress among the more vulnerable businesses in Singapore and abroadcan lead to deterioration in banks’ asset quality, although the increase inbanks’ provisions and strong capital buffers are expected to help mitigate therising credit risk.

Inthe medium term, potential changes to international tax rules could affect taxrevenues and investments by multinational companies. Over the longer term,Singapore would also need to contend with the major challenges arising from anaging population and climate change.

Thereport was based on AMRO's virtual 2021 Annual Consultation Visit to Singaporefrom May 17 to June 18, and data and information available up to July 31, 2021./.

VNA
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