Singapore. Prime Minister Lee Hsien Loong recently warned citizens to brace as economic challenges rain over Singapore, during his speech at May Day Rally on Sunday (1 May 2022).
This comes as Singapore slowly shows signs of economic recovery from COVID-19. The country has removed travel restrictions and is currently on its “new normal.” Moreover, incoming fully vaccinated travellers are no longer required to comply with COVID-19 testing
As the ongoing war in Ukraine shows no signs of slowing down, countries all over the world have been affected, including Singapore, which is expected to face rising energy prices and inflation.
“Inflation was already a problem before Ukraine, but the war has made it worse. The war has caused a worldwide energy crunch and disrupted food supplies,” PM Lee explained.
Lee mentioned that Russia’s attack on Ukraine has put a hamper on rules and norms for how countries interact with each other.
Russia is a major gas and oil exporter, and Ukraine is one of the world’s largest vegetable oils and cereal crops exporters.
PM Lee urged people to “stay open and make our economy stronger and more resilient.”
Global issues have been causing surges in energy prices, and Singapore imports nearly all its energy supply, except solar electricity.
According to estimates by the Ministry of Trade and Industry, Singapore is expected to take on a hit of SGD 8 billion annually, or 1.5% of the country’s GDP.
“That means we have become collectively SGD8 billion poorer off per year, and there is no escape from this,” said Lee.
Lee added that the country’s annual crude oil and natural gas imports that cost S$30 billion have doubled as the oil price increased from $50 to $100 per barrel in the last 16 months.
With this, Singaporean households are expected to brace for more expenses.
“We can recover part of this by charging more for our exports, but the rest has to be borne by us – by Singapore households,” he stated.
Just last week, Singapore’s Central Bank reported that it expects global growth to decrease by 3.9% in 2022 from last year’s 5.4%, as inflation hits its all-time high in 14 years.
Read: Singapore’s inflation to further accelerate in the coming months as it jumps to a 10-year high in March
Lee assured Singaporeans that the government is “doing all it can to cushion the impact on Singaporeans and alleviate the cost-of-living pressures,” adding that if Singaporeans are not united and allow themselves to be divided, Singapore will be done for.
Read: Singaporean Households to get S$100 CDC vouchers and more rebates to cope with rising prices
The speech marked PM Lee’s first major national address after the ruling People’s Action Party announced that Finance Minister Lawrence Wong will eventually succeed in his role as prime minister.