SINGAPORE: In a speech at a Chinese New Year event on Jan 29, Deputy Prime Minister Gan Kim Yong urged businesses in Singapore to remain agile, nimble, and resilient as those born in the Year of the Wood Snake are well known to be.
He stressed that businesses will need to face challenges that could affect the growth outlook in 2025, pointing to the risk of trade frictions brought on by the new US administration’s trade stance.
With US President Donald Trump announcing plans to increase tariffs on imports from all trading partners by as much as 20 per cent, Mr Gan pointed out that this could lead to new cost pressures for “manufacturing and trade-related services sectors”.
Mr Gan, also Minister for Trade and Industry, stated that GDP growth is expected to slow to between 1 per cent and 3 per cent, with core inflation staying between 1 per cent and 2 per cent.
Despite these challenges, he encouraged businesses to remain optimistic and confident.
Speaking at a Chinese New Year event at the Singapore Chinese Chamber of Commerce & Industry (SCCCI), Mr Gan said in Mandarin that businesses must stay agile to seize regional opportunities.
He mentioned that Asia’s economy currently accounts for nearly 50 per cent of the global GDP and is expected to grow to around 60 per cent by 2030.
He highlighted that Southeast Asia, with its expanding middle-income group, favourable demographics, and digital progress, is on track to become the fourth-largest economy by 2030.
“I hope our businesses will leverage the opportunities brought about by the region’s development to grow and expand,” he said, noting Singapore has been working closely with Southeast Asian countries and key partners to strengthen regional ties.
He also pointed out that the China-Singapore Free Trade Agreement Upgrade Protocol has recently come into effect, improving market access, particularly in China’s services sector.
Mr Gan said Singapore is set to finalise and sign the ASEAN-China Free Trade Area 3.0, which will further enhance trade flows and create opportunities in digital and green sectors.
He also highlighted a recent agreement with Malaysia on the Johor-Singapore Special Economic Zone (JS-SEZ), aimed at improving the movement of goods and people across borders.
Singapore has introduced initiatives to help businesses adapt quickly and better understand and address regulatory challenges.
Mr Gan said a committee he chairs will review rules and regulations to reduce the regulatory burden on businesses and encourage innovation.
He added that businesses can improve competitiveness by transforming both enterprises and the workforce through digitalisation.
“We also encourage businesses to adopt AI (artificial intelligence) and other emerging technologies, to improve productivity and develop new products and services,” he said.
Singapore plans to train 15,000 AI practitioners through place-and-train programmes and reskill 18,000 tech professionals in AI and other fields to help businesses leverage digital technologies.
Mr Gan also highlighted that Singapore’s economy performed fairly well last year, with 4% GDP growth, up from 1.1% in 2023, and core inflation easing to 2.7%, a significant drop from 4.2% the year before. He hopes the economy will continue to improve this year. /TISG
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