During the first quarter of 2021, Singapore’s economy surprisingly increased at exponential rates compared to the perceived estimates by the government and financial experts. From the previous GDP estimate of 0.2% rise, Singapore has faced a 1.3% growth from January to March this year.
Because of this positive change, economists expect a stronger performance for the country in the coming months. Additionally, the increase in demands for exports may balance out the risk of border controls and domestic restrictions. Hence, from the original GDP growth forecast of 4 to 6%, the Ministry of Trade and Industry expects a projected 6 to 7% growth for the fourth quarter of 2021.
However, despite this positive outlook, the economic landscape is ever-changing and may show different results in the coming months.
The Economic Situation in Singapore Now
Since May of this year, Singapore has revised safety and health regulations multiple times due to the increase in local infection rates. Many of which have been caused by the newly discovered delta variant. However, because of the increased vaccination rate in the country, the government has decided to relax on the strict COVD-19 measures.
As of August 10, 2021, about 72% of Singapore’s population has been completely vaccinated, which in turn has helped support the country’s economic recovery. Because of the government’s fast action and quick vaccination rollout, the Singaporean government plans to ease rules on social gatherings and border restrictions starting this month.
In doing so, they plan to enforce a two-step approach to reopen the economy completely. The first step, which was kicked off on August 19, allowed 50% of employees working from home to return to their offices. Likewise, dining out and social gatherings in public spaces were permitted to up to five fully vaccinated individuals.
The second phase in this approach involves the reopening of larger-scale events and bigger mass gatherings. However, before proceeding to the second step, the government needs to continue monitoring the situation in the country, as well as survey global behaviours to keep the virus under control.
Regardless of the next actions, the current lift in some COVID-19 measures will already impact the country’s economy and its various sectors in the coming months.
Economic Forecast for the Different Sectors
According to the Ministry of Trade and Industry, the recovery of various sectors remains uneven.
Wholesale trade and manufacturing industries remain strong due to the rebound in global demand. In the same light, the finance sector and information and communications industry show a positive outlook. This is due to the fact that the former is expected to receive increased demand for foreign and domestic credit, while the latter is bolstered by the rise of digital solutions and technological developments.
Though adversely affected by the pandemic, other sectors like retail and food and beverage are expected to recover smoothly, especially with relaxing social gathering restrictions. Moreover, due to the change in consumer behaviour and improved conditions in the labour market, the trajectory for these industries is expected to rise. However, despite the expected growth, they will not be able to return to pre-pandemic levels in the coming months, according to the forecast.
Similarly, industries like tourism and aviation are projected to experience slower growth in the coming months. Because of the emergence of new variants and low demand in travel, activities in tourism-related industries will remain low until the end of the year despite the easing of border restrictions.
Overall, the economic forecast for the last quarter of 2021 is significantly better than expected and shows promising potential for Singapore’s economic recovery.
How Businesses Can Take Advantage of the Economic Forecast
Although economic forecasts are not 100% accurate, these are valuable insights that can drive business decisions in the long run.
With this in mind, business owners can better understand which industries are thriving and can therefore seize the market. But more importantly, businesses can create a strategic plan to counteract challenges and potential risks while future-proofing their businesses.
Alongside business owners, company secretary Singapore should also be updated with this information to help the business thrive.
Corporate secretarial services play an important role to instruct business leaders on the right actions to take. Furthermore, they can use the economic forecast to lead the company in the right direction and maximise its profit. That said, you need to hire company secretary services in Singapore to aid in your business ventures.