Singapore — The economy is likely to grow more slowly next year than the surprisingly fast 7.1 per cent it managed in the third quarter of this year, and expansion will remain uneven in 2022. 

Mr Gabriel Lim, Permanent Secretary for Trade and Industry, said at a virtual press briefing “The recovery of the various sectors of the economy is expected to remain uneven in 2022.”

Ongoing concern over the global economy and inflation also factors into the predicted slowing of Singapore’s economy to between 3 and 5 per cent next year.

For this year, the growth forecast had been between 6 and 7 per cent, and MTI confirmed at the briefing that gross domestic product (GDP) growth this year will be about 7 per cent, helped along by manufacturing and other export-oriented sectors, which are expected to remain strong. 

The official advance estimate had been 6.5 per cent growth.

The economy had actually shrunk by 1.4 per cent in the second quarter but expanded by 1.3 per cent in the third quarter, based on a quarter-on-quarter seasonally-adjusted basis.

In 2022, important sectors such as aviation, tourism, food, and beverage services and retail are still likely to be hampered by travel and other restrictions because of the pandemic.

Even by the end of next year, the F&B industry is not likely to go back to what it was before the pandemic, given that certain events and dine-in curbs could still be in force and the number of tourists may still be small.

“Recovery has definitely started, the reopening borders and easing of mobility restrictions could help consumer facing sectors,” Maybank Kim Eng economist Lee Ju Ye told the South China Morning Post. 

Last month, the Monetary Authority of Singapore (MAS) tightened monetary policy for the first time in three years, as a preventive measure against inflation amid supply-chain problems as economies across the globe began reopening. 

Economist Song Seng Wun of CIMB Private Banking told AFP: “MAS’ move is in response to concerns that inflation globally may stay elevated for longer than what may be currently perceived. For Singapore, which imports everything from food on the table to shoes, it is inevitable that a stronger exchange rate is needed to contain inflation as much as possible.” 

Late in April, the country’s GDP was “projected to exceed the upper end of the official 4–6% forecast range”. That was what MAS had said in its Macroeconomic Review for 2021.

However, growth outcomes would remain disparate across sectors. While prospects had brightened for manufacturing industries, the prognosis remained weak for the construction sector as well as consumer-facing and travel-related industries, MAS said at the time. /TISG

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