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Singapore's economy 'will be affected' with 'troubled' international outlook: PM Lee

Felicia Tan
Felicia Tan12/31/2022 06:39 PM GMT+08  • 2 min read
Singapore's economy 'will be affected' with 'troubled' international outlook: PM Lee
Singapore's Prime Minister Lee Hsien Loong. Photo: Bloomberg
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Singapore’s economy “will be affected” as the international outlook remains “troubled,” says Prime Minister Lee Hsien Loong in his new year message on Dec 31.

“The Russia-Ukraine conflict continues, with no good outcome in sight. US-China tensions are likely to persist. How quickly China recovers from Covid-19 remains to be seen, while the US and European Union (EU) may well enter recession,” he adds.

On this, the Ministry of Trade and Industry (MTI) expects Singapore to see slower growth in 2023 ranging between 0.5% to 2.5%, he stresses.

That said, the Prime Minister noted that the country’s Covid-19 response has enhanced its international standing with great interest expressed in Singapore.

“Many businesses and individuals want to set up shop here and in the region,” he says.

“We must seize the moment. Welcome promising investments and talents of all nationalities to Singapore, while building up our own skills and capabilities, venturing forth to chase our dreams in the region and the world. Together, we will build a brighter future for Singapore and all Singaporeans,” he adds.

See also: Analysts expect to see 'challenging' core inflation in 2023, further tightening cannot be 'ruled out'

In his speech, the Prime Minister also referred to the GST rate that will go up by one percentage point on Jan 1, 2023, onwards.

The higher rate will help finance Singapore’s growing healthcare budget as the country provides healthcare and social services for a rapidly ageing population. The provision will require “considerable resources”, says PM Lee.

Singapore’s Budget 2023 will be delivered by Deputy Prime Minister and the Minister for Finance, Lawrence Wong, in Parliament on Feb 14, 2023.

See also: Analysts anticipate further slowdown of NODX in 1H2023 after underperformance in 2H2022, divided on full-year forecasts

However, the government will be implementing a “comprehensive package” to help households in Singapore cope with the cost of living pressures and cushion the effects of the GST hike. More assistance, on top of the up to $700 cash received by nearly three million Singaporeans, is “on the way” in the new year.

“I thank everyone for contributing our fair shares to public revenues. This will help us greatly to take proper care of fellow Singaporeans, especially our more vulnerable seniors, both for today and for our children’s generation," says PM Lee.

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