Credit: Krishna Srinivasan and Lamin Leigh
Singapore’s impressive recovery from the pandemic is outperforming similar economies, with total output exceeding pre-crisis levels last year, but the rebound has also been uneven.
Decisive policy responses, like the Jobs Support Scheme, helped minimize economic scarring, while rapid vaccinations and long-standing robust economic fundamentals helped Singapore navigate global challenges. However, sectors like tourism, aviation, construction, and in-person services are still lagging. Now, the war in Ukraine is confronting Singapore’s policymakers with new challenges and uncertainty as Russia’s invasion and resulting sanctions raise risks for slower growth and faster inflation.
While the recovery is expected to remain resilient, significant uncertainties cloud the outlook, including risks from more supply-chain disruptions, higher commodity prices, rising interest rates in the largest advanced economies, and weaker demand from major trading partners. Central to the evolving risks to the outlook are developments in China, Singapore’s largest trading partner, as well as global economic fragmentation arising from the war in Ukraine.