Economists polled by Reuters expect Singapore’s economic growth to slow in the fourth quarter of 2021 amid concerns over the Omicron variant. Singapore’s GDP between October and December is expected to reach + 5.4% year-on-year, down from the 7.1% growth seen in the third quarter of the year, according to the poll.
In addition, Singapore’s economic outlook will depend heavily on how the global economy recovers from the crisis caused by the pandemic. The island nation is heavily dependent on international trade and its GDP will be determined by how the economies of its major trading partners fare after the COVID-19 crisis over the coming year.
According to official estimates, Singapore’s GDP for 2021 could be around 7% and decline to 3 to 5% in 2022. Analysts seem more pessimistic, however, anticipating growth of 6.8% in 2021.
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The spread of the Omicron variant has prompted Singapore authorities to crack down on international travel, dealing a blow to its tourism industry – one of the major contributors to its economy. This despite the fact that it enjoys one of the highest vaccination rates in the world, having vaccinated around 87% of its population and delivered booster doses to around 38% of its population to date.
Singapore’s central bank, the Monetary Authority of Singapore (MAS), had resorted to monetary tightening measures at its October meeting amid rising inflation weighing on its economic recovery. Economists widely expect further monetary tightening in April 2022, also due to inflationary pressures.