SINGAPORE — In his New Year message, Prime Minister Lee Hsien Loong wished Singaporeans good health and happiness in 2023, even as he warned of “uncertainties ahead” because of the “troubled” global outlook.
“Our economy will be affected,” he said on Dec 31, adding that the Ministry of Trade and Industry “expects slower growth in 2023 – between 0.5 to 2.5 per cent.”
Happy New Year to all! Let’s stay united in the new year and face whatever comes our way with renewed confidence and hope. Wishing everyone good health and happiness in 2023! – LHL https://t.co/vbPk6W10SK pic.twitter.com/mX0qNAwQ1c
— leehsienloong (@leehsienloong) December 31, 2022
Nevertheless, he acknowledged that Singapore has “a lot to be thankful for in 2022,” noting that almost three years after the Covid-19 pandemic broke out, “things are getting back to normal.”
“We held our first full-scale National Day Parade since the pandemic. Singaporeans can again celebrate our festivals, and reunite with family and friends at home and abroad,” he added, but nevertheless urged everyone to keep current with their vaccinations.
But because of the country’s trade-reliant nature, uncertainties around the globe will have an effect on Singapore’s economy.
“The Russia-Ukraine conflict continues, with no good outcome in sight. US-China tensions are likely to persist. How quickly China recovers from COVID-19 remains to be seen, while the US and EU may well enter recession. Our economy will be affected.”
Exports are expected to decline two per cent this year as a worst-case scenario and, in the best case, show zero growth, Bloomberg reported.
And while the reopening of China, the country’s number one trading partner, may give businesses a boost, the decrease in demand from other markets would have a negative effect.
The US, with its poor economic outlook, is Singapore’s third-largest trading partner.
The International Monetary Fund (IMF) has said that the economy of the US is facing a sharp decline in economic growth, from 6 per cent in 2021 to a projected 1 per cent in 2023.
Interest rates have also gone up in the US as a move to fight higher inflation.
Kay Daniel Neufeld, director and head of forecasting at the Center for Economics and Business Research, told CNN, “It is likely that the world economy will face recession next year as a result of the rises in interest rates in response to higher inflation.”
PM Lee’s full New Year’s message may be found here. /TISG