After a robust 7.2 per cent expansion of GDP last year - albeit from a low base - and with growth projected at 3 per cent to 5 per cent this year, it can be said that the Singapore economy has largely emerged from the shadow of the Covid-19 pandemic. Recent business expectation surveys indicate that for the first half of this year, more companies expect business conditions to improve than to worsen compared with the previous six months. In the service sector, which accounts for about 70 per cent of gross domestic product, 23 per cent of firms are upbeat about prospects, as compared with 9 per cent which expect a deterioration, making for a net weighted balance of a positive 14 per cent. A recent survey by the Economic Development Board shows that in manufacturing, a net weighted balance of 8 per cent expect more favourable business conditions in the first half of 2022, compared to the fourth quarter of 2021.
What is striking is that these largely positive expectations have materialised despite still-elevated levels of Covid-19 infections. Singapore's high vaccination rates have prevented the health system from being overwhelmed by the milder Omicron variant of the virus and enabled a gradual easing of safety measures, a broadening of vaccinated travel lanes and a more simplified testing regime for travellers. The opening of the economy, which is widely expected to continue, will come as a relief to industries that have been hurting from tight safety measures and movement restrictions, such as aviation, travel, hospitality, retail and F&B. Those suffering from labour shortages, such as construction, marine and offshore, will also benefit from easier access to foreign workers.