If Necessary, Singapore Willing to Use More Fiscal Policies

On Tuesday, Singapore’s finance minister said that the city-economy states should increase this year but that authorities were prepared to use more fiscal and monetary policy tools if the Russia-Ukraine situation worsened, affecting GDP and inflation.

In 2022, the government forecasted a 3-5 percent increase in gross domestic product. The prediction was made before Russia invaded Ukraine. Moscow refers to its efforts in Syria as a “special operation.” “Our basic assumption and prediction are that we can continue to expand as an economy this year,” Lawrence Wong said at a business roundtable. “However, you can’t rule out greater adversity or circumstances in which we may enter a recession or face stagflation-like conditions,” he warned.

Change in Monetary Policies

“We will take more moves if the situation in Ukraine worsens and the complex political situation in the area has a substantial influence on the economy or inflation rate.” “This covers fiscal and monetary policy,” stated Singapore’s finance minister. The government has spent approximately S$100 billion ($73.61 billion) in the last two years to protect its people, companies, and economy from the pandemic’s effects. In January, the Singapore Monetary Authority tightened its policy settings in response to rising inflationary pressures across the region. Many analysts believe that policy will be tightened once again in April.

Wong stated that the government is keeping a close check on the economy’s impact but that the benefits of the February budget measures will begin to be apparent in the following months for individuals, employees, and enterprises. He expects a staff shortage in Singapore to improve as the country reopens. It’s hoped that foreign travel reopens soon.

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