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Over the weekend, Singapore’s Prime Minister Lee Hsien Loong addressed the nation, joining a growing list of officials and policymakers saying that the world could face another recession. For Lee, though, the timeline was within the next two years. He said that before the Ukraine-Russia war, inflation was already at a peak in Singapore as the region continued to recover from the economic effects of COVID.
On a domestic level, the country has started living with the virus, easing border controls and social distancing rules. To fight inflation, Singapore’s central bank tightened monetary policies last month. But on an international level, the Ukraine conflict, lockdowns in China and global supply chain issues are all complicating economic comeback. For example, higher energy prices are costing the region an extra US$5.8 billion per year. Last week, its central bank said global growth this year would likely be around 3.9%. Last year it was 5.4%.
“There are many challenges ahead of us,” said Finance Minister Lawrence Wong at a press conference mid-April. “There are some more pressing and immediate ones – the pandemic is not over, we have to get through it. There are considerable economic challenges to tackle arising from the war in Ukraine, not least the threat of higher and more persistent inflation and weaker growth. But beyond these immediate issues, we also need to look over the horizon. There are going to be more challenges in the coming years as we enter this new, uncertain volatile environment.”
“Singaporeans are already feeling the impact of the war on the cost of living,” said Lee during his May Day speech. “Even before Ukraine, inflation was already a problem but the war has made it worse.”