Singapore Parliament: Brexit uncertainty to weigh on global economy for 'at least a few years'

Uncertainty will weigh on global economy for "at least a few years" in the aftermath of Brexit, said Deputy Prime Minister Tharman Shanmugaratnam.
Uncertainty will weigh on global economy for "at least a few years" in the aftermath of Brexit, said Deputy Prime Minister Tharman Shanmugaratnam. PHOTO: REUTERS

SINGAPORE - It is too early to say how events will unfold in the aftermath of Britain's vote to exit the European Union, but uncertainty will weigh on world markets, said Deputy Prime Minister Tharman Shanmugaratnam in Parliament on Monday (July 11).

"We can expect repeated bouts of volatility in financial markets as Brexit is debated and negotiated. But what is of greater concern are the economic and political uncertainties resulting from Brexit. These uncertainties will weigh on the UK, Europe and the global economy for at least a few years, and are likely to dampen growth," said Mr Tharman.

As for the short-term impact of Brexit, Mr Tharman noted that it will mainly be played out in the financial markets, more than on economies.

"The immediate impact of Brexit on currencies and stock markets has also not been a major concern for us," Mr Tharman also said.

He was responding to Mr Patrick Tay (West Coast GRC) on what impact Brexit will have on the investments of sovereign wealth fund GIC and state investment firm Temasek Holdings.

Mr Tharman replied that "we shouldn't rush to a conclusion on the implications of Brexit". He also noted that GIC and Temasek make investments over the long term, and that the 2008 financial crisis had demonstrated their ability to recover from market shocks.

Mr Lim Biow Chuan (Mountbatten) also raised concerns that the uncertainty in the UK could send workers looking to Singapore for employment, and asked what the Government would do to ensure that Singapore does not allow these foreigners to adversely affect employment of citizens in the financial services industry.

Mr Tharman replied: "It's not a framework where everyone who wants to come can move to Singapore. They've got to meet some hurdles."