Singapore's Economy Forecast To Register Growth In 2021

As the possibility of the dissemination of vaccines globally becomes increasingly tangible, economists have predicted a growth of 5.5% in Singapore’s economy come 2021, signalling the end of the worst recession since independence in 1965. The economy has also been forecasted to contract by 6.0-6.5% in 2020, a narrowed forecast as compared to the contraction of 5-7% previously estimated. The positive forecasts followed recent developments which have reflected successful containment of the pandemic and the growing likelihood of vaccines becoming available across the globe. Singapore’s growth may be aided by the upturn of the electronics cycle and the recovery of its regional counterparts, including Malaysia, China and Indonesia.

However, it should be noted that Gross Domestic Product (GDP) is likely to return to pre-pandemic levels only towards the end of 2021, and that the growth in GDP will still be weaker in dollar terms relative to pre-pandemic levels. Furthermore, the Covid-19 situation globally remains very much uncertain, and predicted growth comes under the prerequisite of the containment of Covid-19 both domestically and internationally. In addition, effectiveness of the vaccines after public dissemination remains to be seen. Vaccine roll-outs are expected to be gradual and take months, if not years, to be implemented fully. Employers are expected to remain cautious in hiring, perpetuating unemployment levels.