Finance Minister Lawrence Wong on Tuesday (22 March) warned that though Singapore’s economy is expected to grow, the country should be prepared for negative economic impacts should the war be prolonged.
Mr Wong made these statements at the Singapore Apex Business Summit 2022, held at Marina Bay Sands from 22 to 25 March.
With countries all around the world feeling the crunch of the economic effects caused by the Russia-Ukraine war, ensuring economic growth has become of utmost importance.
On the first day of the summit, Singapore’s official economic forecast was discussed. The nation’s economy is foreseen to grow by three to five per cent this year. However, though he acknowledged that the positive forecast “is still our assumption today,” Mr Wong cited the instability caused by the Russia-Ukraine war as a reason why Singapore should fall into complacency.
Mr Wong considered two possible outcomes and the effects each would have. While the effects of a de-escalation would include an increase in global stability, should the war last longer than is hoped, there will be consequences on the economy.
“(T)here is also the likelihood that things may escalate or that this could be a prolonged war, in which case, there will certainly be an impact on supply chains, on inflation and on global growth, all of which will then impact Singapore,” he said.
Mr Wong also specified two issues to watch out for—stagflation and recession. Stagflation takes place when the global economy becomes stagnant at a time when inflation is high.
In a Facebook post following the forum, Mr Wong stressed the importance of resilience and its role in helping to safeguard Singapore’s economy even in the middle of uncertainty and tension.
“In this volatile world,” he wrote, “we must expect many more shocks to our economy and society. We cannot avoid these shocks. But we can learn to be more resilient – to be able to take some hits, and bounce back and emerge stronger each time.” /TISG