Singapore—Despite the difficulties the country has faced this year due to unstable global conditions, the economy has not entered into a recession quite yet, and the government is keeping a close and watchful eye on it, according to Minister in the Prime Minister’s Office Indranee Rajah.
Moreover, she said, the government is ready to step in with support initiatives for the economy if it deems it necessary to do so.
She added that this is not the first time the country has faced this kind of situation.
Ms Indranee, who is also Second Finance Minister and Second Education Minister, was interviewed on Bloomberg Television on October 3.
She said, “We are not new to difficult economic situations, we’re not new to recessions. We don’t think we’ve gone into a recession as yet, but we’re keeping a very close eye on it.”
The Minister told Bloomberg, “We have been through many recessions,” and that during the global financial crisis Singapore was “one of the very few countries that came through relatively unscathed despite the fact that we are a financial centre.”
Because the country is heavily dependent on exports, it has felt the effects of the China-US trade war, which is now in its third year. Authorities in Singapore have decreased the growth forecasts for 2019 to almost to zero after the economy contracted by 3.3 percent from the first quarter to the second quarter of the year. The results for the third quarter are expected later this month.
Ms Indranee, however, gave the assurance that the government is ready for any situation.
“If there is a need to, and the government needs to step in with assistance, we will do so. If we need some safety nets and buffers, then our agencies will have to step in.”
Furthermore, she added that despite economic tensions felt throughout the region, the government will not be deterred from carrying out its plans to implement huge infrastructure needs.
She said at the Asia Infrastructure Forum last week, “In a global environment like this, you would be looking for something you can put your money into, which hopefully isn’t affected by trade wars and where you can get your returns.”
The Group of 20’s Global Infrastructure Hub has said that US$51 trillion (S$ 70 trillion) in infrastructure investment through the next two decades would be necessary to maintain growth momentum in developing Asia.
The Minister also talked about the next General Election, which is expected to be announced soon. She emphasized that the country will require a government that can give citizens stability whilst growing the economy, concentrate on jobs and build Singapore’s future.
And even if fewer jobs and a weaker economy may cause concerns to voters, the reasons for these issues are external, rather than internal, and Ms Indranee said that it is up to Singaporeans to decide whether the government has done enough to address these issues.
She added that the government is searching for weaknesses aside from the manufacturing sector, which has slowed down, and that there has not been a significant increase in retrenchments. -/TISG