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Author: Chen Lin
SINGAPORE (Reuters) – Singapore’s economy is growing at the fastest pace in more than a decade in 2021 as the country emerges from its worst recorded recession as a result of the deep-seated impact of a pandemic on the coronavirus.
The city-state economy grew by 7.2% in 2021, the first figures showed on Monday, in line with the official government projection and surpassing the 5.4% contraction in 2020.
The financial and transportation hubs, often seen as indicative of global growth, have made an astonishing resurgence as governments around the world change their coronavirus strategies to live with the pandemic, away from “zero-COVID” policies.
Singapore’s fastest-growing gross domestic product was 14.5% in 2010, when the global economy emerged from the financial crisis.
“I expect growth to be relatively strong. As the world economy begins to improve, I believe this will help support the general conditions of Singapore’s external demand,” said MUFG analyst Jeff Ng. “The main threat remains inflation.”
The government has previously said it expects GDP to grow by between 3% and 5% in 2022.
GDP grew by 5.9% year-on-year in October-December, according to a statement from the Ministry of Trade and Industry, which grew faster than expected in a survey of analysts by Reuters.
GDP grew by 2.6% quarter-on-quarter in December-December, higher than the 1.2% increase in the previous quarter in October-December.
PRICE PRESSURES
In addition, the Southeast Asian city-state on Monday saw a 5% rise in private house prices in the fourth quarter, the highest since 2009.
The government has put in place a package of measures to cool its real estate market https://www.reuters.com/markets/rates-bonds/singapore-announces-measures-cool-property-market-2021-12-15 last month, including the rise. tightening stamp rates and loan limits.
Prime Minister Lee Hsien Loong said last week in a New Year’s message https://www.reuters.com/markets/asia/singapore-economy-sees-steady-recovery-need-raise-tax-pm-2021-12-31 Singapore’s economy is constantly recovering and the government sees a need to start raising sales tax.
The government has announced a plan to raise the tax on goods and services by 2 percentage points from 2022 to 2025.
While analysts expect the economy to continue to grow, they warned that the Omicron coronavirus variant could become a drag if social exclusion rules are tightened again.
The city-state has vaccinated 87% of its population. As of Saturday, 41% of the population had received a COVID-19 booster.
Sung Eun Jung of Oxford Economics expects that the services sector will drive growth more than manufacturing in 2022 as domestic demand boosts as it improves.
“We expect monetary and fiscal policies to tighten further this year, with price increases expected with increasing projected GST,” he said.
Economists expect the central bank to tighten again in April this year as price pressures continue https://www.reuters.com/world/asia-pacific/singapore-nov-core-inflation-rises-by-16-stays-near -three years highest-2021-12-23. Like major financial centers around the world, Singapore has seen its inflation rate rise in recent months, with prices rising 3.8% in November, the fastest in nine years.
The Singapore Monetary Authority unexpectedly tightened https://www.reuters.com/world/asia-pacific/singapore-central-bank-tightens-policy-surprise-move-2021-10-14 at its last monetary policy meeting. October increases in inflationary pressures caused by supply cuts and the recovery of the global economy.
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