Singapore’s Economy to Make a Sharp But ‘Uneven’ Recovery in 2021: AMRO

Singapore’s economy is projected to rebound this year from the impact of the pandemic, but the recovery could be uneven, a regional macroeconomic organization said in a June 21 report.

Singapore’s GDP is projected to expand 6.1%, following a 5.4% downturn last year.

The ASEAN+3 Macroeconomic Research Office (AMRO), which held a virtual consultation with Singaporean officials from May 17 to June 18, expects the Lion City’s GDP to expand 6.1% tis year, following a 5.4% downturn last year.

AMRO lead economist Chaipat Poonpatpibul said the city-state's “swift, sizeable, and more targeted policy measures have effectively cushioned the impact of the pandemic and supported the recovery.” He also called for additional support in case the recovery hits a bump due to a potential resurgence of the virus.

Singapore’s economy performed well among different sectors including the labor market, manufacturing sector, and electronic demand. These industries are expected to strengthen and moderate the inflation rate as long as the city-state can contain the transmission of coronavirus disease.

Elsewhere, employment is expected to remain persistent, while the financial services industry is likely to maintain their bank loan provisions for businesses to minimize credit risk.

However, the future remains clouded with uncertainties. In particular, the pandemic-hit travel and tourism industry is likely to significantly contribute to an “uneven recovery.” Part of AMRO's policy recommendations is to avoid lockdowns and delay in vaccination rollouts for international travel to revive its consumption and investment activities.

Meanwhile, authorities are confident that as long as major sectors improved steadily, the risk and consequences of sluggish businesses would remain manageable.