PM Lee warns world ‘has problems’, Singapore avoids recession

Singapore’s economy avoided a recession in 2023 as Prime Minister Lee Hsien Loong warned of a “challenging” international environment weighing on growth and security.

In his New Year’s message, Prime Minister Lee said gross domestic product (GDP) expanded by 1.2%, compared with the Trade Ministry’s forecast of about 1% in November. He reiterated his official forecast for 2024 growth of 1-3%.

Li said 2023 will be a “challenging year” as tensions between the US and China remain and the war in Ukraine is at a “strategic stalemate with no resolution in sight.” He pointed to global “disgust and anger” at the human suffering in the conflict between Israel and Hamas.

“We must expect the external environment to become unfavorable for our country’s security and prosperity in the coming years,” Lee said. “Geopolitical uncertainty will continue to weigh on the global economy.”

Lee, 71, has been prime minister since 2004 and is expected to hand over power to deputy prime minister Lawrence Wong in 2024. In what is likely to be his final New Year’s message, Mr Lee called on Singaporeans to give their full support to the new leadership. .

“This is not the first time there has been a change in leadership,” he said. “But transitions are always delicate. Singapore will be the subject of intense scrutiny. How the new leaders will bond with Singaporeans and whether our small country will be successful and exceptional. People in Japan and abroad are paying attention to whether we can continue to exist.”

Under Lee’s government, Singapore’s per capita income rose from about $27,600 in 2004 to $87,880 in 2023, making the small island nation one of the richest countries in the world.

While presiding over one of the world’s most competitive economies, he has helped the city-state weather the global financial crisis and the COVID-19 pandemic, as well as major powers such as the United States and China, as well as neighbors Malaysia and Indonesia. We have helped build stronger relationships with

Given that Singapore’s exports are more than 1.5 times the size of the island’s economy, Singapore’s prospects depend on a sustained recovery in global trade. Overseas shipments increased in November for the first time in 14 months, but the main reason for the increase was a lower year-on-year comparison.

Mr Lee said that although the economy will grow in 2023, households will still feel pressure from rising living costs, although inflation is gradually easing.

Curbing inflation has been a top priority for policymakers since the city-state reopened after the pandemic. The government announced billions of dollars worth of support, but the central bank kept the local dollar on track to slow import inflation.

Goods and services tax will rise by 1 percentage point to 9% from January 1, adding to further upward pressure on prices, although the prime minister said the increased revenue would help the government pay for rising health costs. He said authorities would continue to provide financial support and subsidies to cushion the impact.