Singapore’s Economy Rebounds from Pandemic

Singapore has seen an impressive recovery from the COVID pandemic, outperforming similar economies thanks to decisive policy actions, the International Monetary Fund (IMF) said in a report on 24 August. 

Total output of the economy of the ASEAN member state exceeded pre-crisis levels last year, said Krishna Srinivasan, Director of the IMF’s Asia and Pacific Department, and Lamin Leigh, the Singapore and Malaysia mission chief in the IMF’s Asia and Pacific Department.

Although the economic rebound has been uneven, decisive policy responses, like the Jobs Support Scheme, helped minimize economic scarring, the IMF reckons.

Rapid vaccinations and the long-standing robust economic fundamentals helped Singapore navigate global challenges during the pandemic. Still, tourism, aviation, and in-person services are lagging behind other sectors following the pandemic-related lockdowns, the IMF noted.

Singapore’s recovery is set to remain resilient, the fund said, but warned that new challenges lie ahead with risks of renewed supply-chain disruptions, rising key interest rates, and higher commodity prices.

“Should further risks materialize beyond what is currently envisaged, Singapore can deploy its ample fiscal buffers to cushion the economic impact,” the IMF said.

With the easing of the pandemic, the focus of Singapore’s policymakers has appropriately shifted to accelerating economic transformation towards a digital, more inclusive, and greener economy.

“Plans to accelerate digital adoption and innovation, while keeping the appropriate safeguards to preserve financial stability, will help maintain Singapore’s preeminent status as a key regional innovation hub,” the fund added.

The IMF currently expects Singapore’s real gross domestic product (GDP) to grow by 4.0 percent this year, with consumer prices rising by 3.5 percent.