SINGAPORE – Singapore’s finance minister said on Tuesday the city-state’s economy should continue to grow this year, but authorities were ready to deploy more fiscal and monetary policy measures if a worsening Russia-Ukraine crisis impacted growth and inflation.
The government had projected gross domestic product to expand 3-5% in 2022.
The forecast was provided before Russia’s invasion of Ukraine. Moscow calls its actions there a “special operation”.
“Our baseline assumption and projection is still that we are still able to continue growing as an economy this year,” Lawrence Wong told a business forum.
“But you cannot rule out more adverse situations or scenarios where potentially we enter a recession, or we start to experience stagflation-like conditions,” he said.
“If things start to get worse in Ukraine and we see a huge impact on our economy or on inflation, we will certainly not hesitate to do more whether through fiscal or monetary policy to make sure that we keep the economy steady or stabilise prices…”
Over the past two years, the government has committed close to S$100 billion ($73.61 billion) to cushion its people, businesses and the economy from the impact of the pandemic.
The Monetary Authority of Singapore tightened its policy settings in January due to increased inflation pressures across the region. Many economists expect it to tighten policy again at its April review.
Wong said the government was closely monitoring the impact of the crisis on the economy, but households, workers and firms will start to see the benefits from measures announced in the February budget over the coming months.
He expects a manpower shortage in Singapore to start easing as the country progressively reopens.
“I’m quite sure we will soon be able to open up for freer international travel and when that happens, it will be much easier for firms to bring in workers,” he said.
($1 = 1.3585 Singapore dollars)
(Reporting by Aradhana Aravindan; Editing by Martin Petty)