Singapore's economy probably has not slid into recession yet, though the Government is monitoring conditions closely and will step in with support measures if needed, said Ms Indranee Rajah, Minister in the Prime Minister's Office.
"We're not new to difficult economic situations, we're not new to recessions," Ms Indranee, who is also Second Minister for Finance and Education, said in an interview yesterday with Bloomberg Television's Juliette Saly. "We don't think we've gone into a recession as yet, but we're keeping a very close eye on it."
Export-reliant Singapore has acutely felt the pressures of the United States-China trade war, with officials lowering the 2019 growth forecast to almost zero after the economy contracted an annualised 3.3 per cent in the second quarter from the previous three months. Third-quarter figures are due this month.
"If there is a need to, and the Government needs to step in with assistance, we will do so," Ms Indranee said.
The economic strain throughout the region is not likely to keep governments from accelerating plans to address massive infrastructure needs, she said.
Singapore is moving forward with efforts to standardise language around project financing and to help train government officials on how to draw private-sector support for such deals, Ms Indranee announced this week at Singapore's Asia Infrastructure Forum.
"In a global environment like this, you would be looking for something you can put your money into, which hopefully isn't affected by trade wars and where you can get your returns," she said.
Singapore is finding its niche as a legal hub to help build infrastructure deals as "bankable" and win more private-sector support. Developing Asia requires US$51 trillion (S$70.5 trillion) in infrastructure investment until 2040 just to keep up growth momentum, according to the Group of 20's Global Infrastructure Hub.
In her capacity as Second Minister for Finance, Ms Indranee said the Budget due for release early next year will likely include further measures to boost productivity and innovation and help workers adapt to advanced technology. On the social development side, the Government will probably expand on plans to increase subsidies for pre-schools and other family support, she said.
With an election looming, she said Singapore needs a government that can provide stability, grow the economy, focus on jobs and build a nation for the future. While a weakening economy and job losses may worry voters, Ms Indranee said the current downturn was due to external factors, and Singaporeans will judge whether officials have done enough to mitigate those pressures.
The Government has been monitoring labour-market measures closely for any sign that weakness is spreading beyond the ailing manufacturing sector. So far, retrenchments have not significantly increased.
"We've been through many recessions," Ms Indranee said, adding that during the global financial crisis, "we were one of the very few countries that came through relatively unscathed despite the fact that we are a financial centre".
BLOOMBERG
