Prime Minister Lee Hsien Loong warned of tougher economic times ahead, especially due to Russia’s attack on Ukraine, to the extent of a possible recession in the next two years.
And while he underlined that the government would continue to provide support and help with cost-of-living increases, PM Lee told unionists who had gathered for the May Day Rally that “this does not really solve our problem.”
Netizens commenting on the Prime Minister’s speech acknowledged that the events affecting Singapore’s economy are beyond the government’s control, but asked him, in view of his speech, about the rise in the Goods and Services Tax GST).
Singapore has felt the rise in fuel prices keenly, PM Lee added, as the increase will set the county back around S$8 billion per year.
PM Lee said that Russia’s incision of Ukraine, which began on Feb 24, may drag on for “quite a while longer,” and as it continues, he sees “no good outcome.”
He warned that the risk of the conflict escalating grows the longer it continues, adding, “If the war spreads beyond Ukraine’s borders, or unconventional weapons are used, no one will be able to control how the situation unfolds.”
Back home, the conflict has already affected the cost of living for Singaporeans, who were feeling the effects of inflation even before Russia invaded Ukraine.
“But the war has made it worse,” the Prime Minister said.
However, he assured that “the Government is doing all it can to cushion the impact on Singaporeans and alleviate the cost-of-living pressures,” including the $560 million Household Support Package, which had been announced when Budget 2022 was rolled out in February.
The dollar has also appreciated after the Monetary Authority of Singapore tightened monetary policy to reduce imported inflation, and the government has implemented measures to secure both fuel and food supplies.
But the Prime Minister said, ”All this will help, but we must be prepared for more economic challenges in the year ahead.
Global growth will be weaker and there may be a recession within the next two years. Singapore is tightly integrated into the global economy (and) given our small size, we will always be a price taker in world markets, so we cannot avoid these global headwinds.”
Commenters on the Facebook pages of The Straits Times and TODAY expressed no surprise about tougher economic times ahead but asked about the GST hike.
Others, however, thanked PM Lee for telling people “the bleak truth”.
/TISG