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Singapore economy expected to bounce back this year, bulk of it 'should be able to recover': PM Lee

Singapore economy expected to bounce back this year, bulk of it 'should be able to recover': PM Lee

Prime Minister Lee Hsien Loong and his wife Ho Ching with staff from Singapore Airlines on the first day of Chinese New Year, Feb 12, 2021. (Photo: Ministry of Communications and Information)

SINGAPORE: The bulk of Singapore's economy is expected to recover this year after last year's drubbing from the COVID-19 pandemic.

Some sectors - such as transport, tourism and aviation - may take a longer time to do so, said Prime Minister Lee Hsien Loong on Friday (Feb 12). 

"Last year was minus five to six per cent. That was particularly also because we had a 'circuit breaker' period, which had a big impact on activity," Mr Lee told reporters after visiting staff from Singapore Airlines and Changi General Hospital on the first day of Chinese New Year.

READ: Despite ‘exceptionally testing’ COVID-19 year, Singapore can see light at the end of the tunnel: PM Lee

"I am not sure that even if we bounce back, we will be able to get back beyond where we were in 2019, before COVID-19 hit," he said.

Singapore’s economy shrank a record 5.8 per cent in a pandemic-hit 2020, according to preliminary data released last month, although most industries saw some improvement in the fourth quarter of last year as COVID-19 restrictions were eased.

Singapore's recovery in 2021 will depend on how its vaccination drive progresses, as well as the rate of similar initiatives in other countries, particularly the United States and Europe, said Mr Lee.

Singapore's economy relies heavily on global trade.

The prime minister said the construction sector has its own set of challenges as well, due to migrant workers and safe management measures, "but we will address that separately". 

READ: COVID-19: Seniors in Ang Mo Kio, Tanjong Pagar to get vaccinated from Jan 27; national roll-out for elderly begins mid-February

READ: More than 52,000 transport workers have received first dose of COVID-19 vaccine

Passenger traffic is "a long way from recovery", said Mr Lee, because many countries are "very severely restricting international travel", particularly with new, potentially more dangerous variants of the virus emerging.

"I do not think you can expect to go back to the days when you just buy a ticket and go up to Bangkok or Hong Kong for a weekend, for some time to come.

"That would be several years - even IATA (International Air Transport Association) has said four to five years ... Meanwhile, the airlines have to make adjustments to tide over this period and the Government will do our best to help them.

"But it cannot just be that we write checks for the salaries and then no adjustment is made. These are ongoing conversations between us and the industry," Mr Lee said.

The prime minister also touched on vaccinations and the alternative arrangements that are in place should vaccine supplies get disrupted. 

READ: Rules on visiting and tossing yusheng: 7 things to note this Chinese New Year amid COVID-19

"First of all, for vaccinations, we have hedged our bets and we have ordered and pre-ordered vaccines from multiple suppliers. I hope that not all of them will get disrupted. 

"There may be disruptions and delays along the way as we have seen earlier. I think the flows look like a reasonable prospect of starting up and making good again ... You see Pfizer-BioNTech, for example, saying that they are going to restart their plant and then it will expand their capacity.

"I am reasonably confident that we will get the vaccines we need this year," he said.

If the vaccines are late, "our vaccination programme will have to stretch out a little bit" and Singapore will have to keep its other safe management measures longer and more strictly, said Mr Lee.

"But we can live with that. Even if we have vaccinated most of the people in Singapore, I do not think that it will enable us to go back completely to normal ... We will have to move to living with COVID-19 in some form for quite some time," he added. 

Prime Minister Lee Hsien Loong and his wife Ho Ching with staff of Changi General Hospital on the first day of Chinese New Year, Feb 12, 2021. (Photo: Ministry of Communications and Information)

When asked if the various sectors could withstand potential future lockdowns, Mr Lee said he hopes such a measure will not be required again because it will "have a big impact".

From Apr 7 to Jun 1 last year, Singapore underwent a circuit breaker period during which non-essential activities were halted to contain the spread of COVID-19.

"You can be resilient, you can have capabilities, but if we cannot do business for two-three months, it is going to hurt," Mr Lee said.

He added Singapore is making sure it builds up its people with skills training and that companies build up capabilities to ensure they are well-placed to do business in a new post-COVID-19 world.

The priority, however, is the safety of the people, and ensuring safe management measures are complied with, he said.

"That is why, this Chinese New Year, at most eight visitors and please only visit two households," Mr Lee said.

"It has to be a more subdued mode. There will be time to celebrate in a more carefree way later on."

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Source: CNA/kv(hs)

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