On 15 May 2024, Lee Hsien Loong, Singapore’s Prime Minister for the past twenty years, will hand over the reins to his current Deputy Prime Minister, Lawrence Wong. This change in leadership is not expected to alter the highly disciplined management of monetary and fiscal policies, or the government’s economic development strategy, which is aiming, in particular, to adapt the country to climate change and to boost its potential growth. In 2024, economic activity is expected to pick up slightly, notably thanks to the improving global electronics cycle; inflationary pressures should continue to abate, but will nonetheless remain high. Against this backdrop, the authorities are expected to keep monetary policy settings unchanged this year.
Singapore is a small territory with few natural resources. It enjoys a strategic geographical location in Asia and a world-leading, technically competent and productive workforce. Singapore ranks as one of the world’s most open economies and well-run states. Over the past decade, the focus of Singapore’s economic policy has shifted to maintaining its competitiveness in attracting trade and investment flows by building a more technology-driven, innovation-based growth model. Singapore’s real GDP growth has been more volatile since the early 2000s. Singapore is vulnerable to the impact of the US-China trade conflict and global trade weakening given its very high degree of trade and financial openness (exports represented more than 200% of GDP in 2019 and trade-related sectors account for more than 50% of GDP). The city-state then was very hard hit by the COVID-19 shock, with an economic contraction of -5.4% in 2020. However, Singapore’s strong macroeconomic fundamentals, with solid external and fiscal accounts, and sound policy management represent comfortable cushions against shocks.
