Singapore’s economy managed to avoid a recession in 2023, growing by 1.2%, slightly surpassing the trade ministry’s November forecast. Prime Minister Lee Hsien Loong, in his New Year’s message, warned of a “troubled” international environment that would impact growth and security. Despite external challenges, he reaffirmed the official economic projection for 2024, anticipating a growth rate between 1% and 3%.
Lee characterized 2023 as a “challenging year” marked by ongoing tensions between the U.S. and China and the Ukraine conflict reaching a ‘strategic’ deadlock. He highlighted global concerns over the Israel-Hamas conflict, acknowledging widespread “revulsion and anger” over human suffering.
Prime Minister Lee, who has been in office since 2004, emphasized the need for Singaporeans to support the leadership transition as he prepares to hand over power to his deputy Lawrence Wong in 2024. Reflecting on his tenure, Lee noted Singapore’s remarkable economic progress, with per capita income rising from $27,600 in 2004 to $87,880 in 2023, establishing the nation as one of the world’s wealthiest.
Under Lee’s leadership, Singapore navigated through numerous challenges while fostering robust economic competitiveness. The Prime Minister emphasized the importance of strong relations with major powers like the U.S. and China, as well as neighbouring countries like Malaysia and Indonesia.
The outlook for Singapore’s economy hinges on a sustainable recovery in global trade, given that exports contribute significantly to the nation’s economic size. Although November saw a rebound in overseas shipments after 14 months of contraction, Lee acknowledged the dependence on global trade dynamics.
Lee also acknowledged that households are still grappling with the impact of higher living costs. Taming inflation has been a top priority, with the government announcing multi-billion-dollar support measures, and the central bank maintaining an appreciating path for the local dollar to counter imported inflation.
To address the rising expenses, a 1 percentage point increase in the goods and services tax to 9% from January 1 was implemented. Lee assured that the additional revenue would contribute to covering growing healthcare expenses.
Despite all the challenges, Singapore’s resilient economy, navigating global challenges under Prime Minister Lee Hsien Loong, has demonstrated stability in the face of a troubled international environment. As a leadership transition looms, the nation’s economic growth and commitment to managing inflation underscore Singapore’s ongoing adaptability and strategic economic resilience.