Singapore’s de facto central bank said on Wednesday that economic growth could top the previous upper-end projection of 6 per cent cent, if global demand holds up and there is no local resurgence of the coronavirus.
According to a report by the Monetary Authority of Singapore (MAS), “GDP [gross domestic product] growth in 2021 is projected to exceed the upper end of the official 4–6 per cent forecast range, barring a significant setback in activity from a weaker recovery of the global economy or surge in locally transmitted cases.”
The MAS said, however, that the growth will be uneven and that the “prognosis remains weak” for sectors badly affected by the pandemic and related restrictions, particularly tourism.
Although Singapore has sought to set up business travel links with several countries and this week announced a long-awaited “travel bubble” with Hong Kong would open at the end of May, the MAS warned that “an early, widespread reopening of international borders remains unlikely.”
Singapore’s economy shrank by a record 5.4 per cent last year, with most of the damage done during a second-quarter lockdown.
Measured quarter-on-quarter, growth returned during the second half of 2020 and has continued into early 2021, driven by “strengthening external demand,” according to the MAS.
Other indicators suggest Singapore’s economy continues to recover from last year’s losses.
After the Economic Development Board reported on Monday that manufacturing output increased by over 7 per cent in March, the fifth month in a row that expansion was recorded, the Manpower Ministry on Wednesday reported a rise in the number of employed for the first time since late 2019, measured on a quarterly basis.
Though the labour market “is still not fully back to pre-Covid-19 conditions,” according to the ministry, it is “continuing to recover from the impact of the Covid-19 pandemic.”
Employment of migrants continued to decline, however, with the MAS citing “difficulties faced by firms in replacing outgoing foreigners due to Covid-related travel restrictions globally.”
Singapore last week banned arrivals from India, including those with work permits, citing the record coronavirus case numbers there.
Most of Singapore’s roughly 60,000 cases of the virus were reported last year among young male migrant workers living in crowded dormitories.