SINGAPORE (BLOOMBERG) - Singapore Trade and Industry Minister Chan Chun Sing said a faster economic recovery from the coronavirus pandemic would depend on the availability of affordable, rapid test kits and the roll-out of a vaccine.
"If either one of these or both come about in the next few months, then I think there's a much better chance of us recovering faster," he said on Wednesday (May 20) in an interview with Bloomberg.
For now the economy faces many challenges, despite recent data showing a surprise improvement in exports, Mr Chan said.
"We are quietly encouraged by some of the positive numbers coming in for the first quarter despite the headwinds," he told Bloomberg Television's Haslinda Amin. Still, the Government is "not complacent" as "the downside risks are still many".
Singapore's heavily trade-reliant economy has taken a beating from restrictions imposed globally to contain the coronavirus outbreak, with preliminary data showing Singapore's gross domestic product plunged 2.2 per cent in the first quarter from a year earlier, the worst performance since the global financial crisis.
Data this week showed non-oil domestic exports unexpectedly gained 9.7 per cent in April, though that was mostly due to a jump in the volatile pharmaceuticals category from a low base in the same period last year.
Mr Chan said Singapore's unemployment figures haven't risen dramatically, largely due to stimulus measures to defray wage costs. The Government plans to announce a scheme to help fresh graduates get into new jobs or some internship or training opportunities, Mr Chan said.
However, he said the labour market remains a concern for Singapore and the global economy in coming months, with major ramifications.
"What started out as a health crisis has now gone on to an employment and business closure issue," he said. "If these two issues are not handled well", it could lead to a rise in protectionist measures, possible contagion effects and more pain in financial markets.
It's "too early to say if the worst is over for the global economy" as infection rates are rising again in some places where they previously were under control, Mr Chan said.
Given that infected people may not show symptoms, a rapid test kit would aid in resuming international travel and many other activities, Mr Chan said. Until then, he added, the Government has "put to the back" activities that require a lot of social interaction.
Unlike when the Government was trying to contain the 2003 outbreak of severe acute respiratory syndrome, or Sars, the massive lockdowns imposed around the world to fight Covid-19 mean that "lost production and capabilities will take some time to recover", Mr Chan said.
Singapore announced on Tuesday it will begin reopening some businesses from June 2, resulting in three-quarters of the economy resuming operation. Sectors like manufacturing, finance, insurance and wholesale trade will be able to restart more operations.
Mr Chan said the authorities are looking at establishing travel corridors with other countries, such as China, Australia, New Zealand and South Korea, once they've settled on shared protocols.
He also warned against countries resorting to trade protectionist measures and competitive currency devaluations as they try to revive their economies.
The Government is set to release final first-quarter GDP figures on May 26 and may revise its current projection that the economy will contract 1 per cent to 4 per cent this year. Deputy Prime Minister Heng Swee Keat is also expected to announce details of a fourth stimulus package on the same day.