Singapore's economy avoided recession and grew 1.2 percent in 2023, Prime Minister Lee Hsien Loong said on Sunday, but warned that geopolitical risks will weigh on growth next year.
The wealthy city-state's economic performance is often viewed as a barometer for the global environment due to its dependence on international trade.
“We achieved 1.2 percent growth this year, avoiding recession,” Lee said in his New Year's message.
Growth of 1.0 to 3.0 percent is forecast for next year, “but a lot will depend on the external environment,” he added, citing the ongoing war in Ukraine and Israel's conflict with Hamas.
The economy has been hit by weaker global demand for its exports, with the return of air travel following the Covid-19 pandemic boosting domestic growth.
Advertisement – Scroll to continue
“In the coming years, we must expect that the external environment will be less favorable to our security and prosperity. Geopolitical uncertainties will continue to weigh on the global economy,” he said.
“There are tensions and risks in our own region due to rival claims in the South China Sea and the situation across the Taiwan Strait. These can affect trust in the region and thus our growth.”
Maritime tensions have increased recently after China and the Philippines blamed each other for a series of incidents in the region, including a collision between their ships.
Advertisement – Scroll to continue
Lee also cited climate change as another challenge for the low-lying island nation.
“We are already feeling the effects,” he warned.
“Singapore must adapt and prepare for rising temperatures and rising sea levels, as well as transition our economy to net-zero carbon emissions. This will be costly and challenging.”
Advertisement – Scroll to continue
Lee, who has been prime minister since 2004, called for unity as he prepares to hand over the leadership next year to his deputy, Lawrence Wong, who is also finance minister.
“This is not the first time we have seen a change in leadership. But transitions are always delicate,” he said, adding that Singapore “will face close scrutiny” over whether it can “remain successful and exceptional.”
If Wong takes over, it would be only the second time since Singapore's independence in 1965 that the prime minister is not from the Lee family.
Lee's father, Lee Kuan Yew, was the country's first prime minister.
MBA/DHW
Comments are closed.