- GDP is forecast to grow by 6.3% in 2021 and 4.0% in 2022
- Economy continues to recover steadily from a sharp contraction in 2020 on the back of effective containment measures, accelerated vaccination rollout, extended policy support and robust exports
The Singapore economy is forecast to grow by 6.3% in 2021 and 4.0% in 2022, the growth underpinned by the recovery in domestic economic activities and robust exports, according to a new report by the ASEAN+3 Macroeconomic Research Office (AMRO).
Singapore’s economy continues to recover steadily from a sharp contraction in 2020 on the back of effective containment measures, accelerated vaccination rollout, and extended policy support for affected businesses and households, said the 2021 Annual Consultation Report on Singapore published November 8 by AMRO.
The steady recovery follows the progressive resumption of economic activities since the second half of 2020, bolstered by strong policy support and effective containment measures. As a result, the overall unemployment rate has declined to 2.7% in June 2021 from its peak at 3.5% in the third quarter last year.
However, the recovery in tourism-related sectors will remain slow due to the continued restrictions on cross border travel, reflecting the resurgence of the pandemic and the slow pace of vaccination in many countries.
In the short term, key risks to growth are a resurgence of the COVID-19 pandemic and the resulting adverse effects on hard-hit businesses and households.
In the medium term, potential changes to international tax rules could affect tax revenues and investments by multinational companies. Over the longer term, Singapore would also need to contend with the major challenges arising from an aging population and climate change.
The government’s roadmap to ensure safe reopening and support a transition to the new COVID-19 endemic normal is crucial in securing Singapore’s economic recovery in 2021 and beyond, said AMRO, a regional macroeconomic monitoring organization.
“The large and timely policy support bolstered by fiscal reserves has significantly mitigated the impact of the pandemic on the economy and supported the strong recovery. With most sectors improving steadily, the shift in policy support from a broad-based to a more targeted approach is appropriate,” the report said.
Photo by Basile Morin
