For a tiny place so intimately tied to the ebbs and flows of finance, it’s hard to see signs in Singapore of an approaching world recession. The city-state is again sucking in foreign labor, driving the jobless rate to microscopic levels. The country’s airline is racking up profits and the increase in housing rents is staggering. The global slowdown often feels like it’s happening on another planet.
The question might not be so much whether Singapore’s economy has become a bubble, a loaded term that implies a painful collapse awaits, but how long the nation can continue to defy gravity. Officials have warned that big shifts worldwide pose enormous challenges: the end of a decades-long era of low inflation and interest rates, a desire to rein in supply chains, and intensified rivalry between China and the US. Dire stuff — in theory — for a republic that grew rich during the heyday of globalization and capital-market expansion.
When and how this catches up with Singapore depends a lot on Covid and its legacies. Specifically, the reopening lead Singapore has on rivals. After a couple of false dawns, the city-state has dispensed with almost all restrictions. Mandatory masking indoors ended in August. Barely a week goes by without Singapore hosting at least one big international conference. Hong Kong still wrestles with testing rules for travelers. The territory’s hidebound approach, coupled with the national security law imposed by Beijing, has prompted an exodus. It’s hard to go to any kind of social or business event in Singapore and not encounter some who have fled.
