Regional economies are ramping up their Covid-19 vaccination efforts, which should facilitate the resumption of higher economic activity in the coming quarters, Minister-in-charge of Trade Relations S. Iswaran said yesterday.
This is so even as these South-east Asia economies have had to reimpose tight restrictions to curb a resurgence in Covid-19 infections, he said in Parliament.
Addressing a question from Mr Liang Eng Hwa (Bukit Panjang) on the basis of the Ministry of Trade and Industry's (MTI) upward revision of economic growth for the year, Mr Iswaran said that this revision was made with several global developments taken into account.
Singapore's economy is now projected to expand 6 per cent to 7 per cent this year, higher than the earlier forecast of between 4 per cent and 6 per cent.
First, the global economic recovery has remained largely on track, notwithstanding the risks posed by the pandemic, Mr Iswaran said, noting how high vaccination rates in key advanced economies such as the United States and the euro zone have allowed them to continue with reopening even amid a rise in infections.
Second, Singapore's gross domestic product growth in the first half of the year came in at a better-than-expected 7.7 per cent year on year.
"At the same time, our vaccination programme has made good progress, which will allow for the progressive easing of domestic and border restrictions over the course of the year," Mr Iswaran said.
This easing will help to alleviate labour shortages in sectors such as construction that are reliant on migrant workers, and support the recovery of consumer-facing sectors such as food and beverage services, he added. But he cautioned that the tourism and aviation-related sectors are likely to see a slow recovery due to ongoing global travel restrictions and weak travel demand.
MTI expects the Singapore economy to continue to recover next year as global growth is projected to remain positive, he added. The ministry will announce the Republic's 2022 growth forecast in November.
Choo Yun Ting