Singapore’s economy continues to recover steadily in 2021 and 2022 from a sharp contraction last year, on the back of effective containment measures, accelerated vaccination rollout, and extended policy support for affected businesses and households.
In the short term, key risks to growth are a resurgence of the COVID-19 pandemic and the resulting adverse effects on hard-hit businesses and households. In the medium term, potential changes to international tax rules could affect tax revenues and investments by multinational companies. Over the longer term, Singapore would also need to contend with the major challenges arising from an aging population and climate change.
Against this backdrop, the authorities are encouraged to remain flexible and be prepared to extend further support in the event of a resurgence in infections or if growth falters. Efforts to accelerate structural transformation plans is essential in strengthening workforce productivity and firms’ competitiveness.
In addition to assessments on the Singapore economy and policy recommendations, the report takes a deep-dive into several key issues confronting the economy: (i) Singapore’s fiscal response to COVID-19 crisis; (ii) The pandemic’s impact on the labor market; and (iii) Rise of modern services as a growth driver.