Gov’t sees no recession in 2023: Tan

Authorities readied plans to combat high inflation.

Despite the continued rising inflation, Minister of State for Trade and Industry Alvin Tan said they do not expect recession or stagflation next year whilst staying prepared for global economic threats.

"We expect growth to moderate further next year. At this stage, we do not expect a recession or stagflation in 2023. Nonetheless, risks in the global economy remain significant," Tan said, in reply to parliament questions on the risk of stagflation. 

“These [risks] include further escalations in the Russia-Ukraine conflict, more severe global supply disruptions, risks to financial market stability if monetary policy tightening in advanced economies is faster than expected, and the trajectory of the COVID-19 pandemic,” he added. 

Tan also pointed out that rising global interest rates will impact lending and mortgage rates.

With higher global interest rates, Tan said Singapore’s domestic interbank interest rates also rose in tandem but it was moderated by boosting the Singapore dollar.

Once global interest rates could grow further, Tan warned businesses and households to look out for rising borrowing rates.

Government plans

With core inflation up 3.6%, the highest since 2008, the government has plans to address businesses and residents’ concerns by retaining a stable macroeconomic environment to ensure investor confidence.

For its part, the Monetary Authority of Singapore has been tightening monetary policies since October 2021. 

“The appreciation of the Singapore Dollar will help temper imported inflation,” Tan also said.

To help mitigate the impacts of rising prices, Singaporeans will also benefit from a $1.5b support package.

Some residents were already overwhelmed by inflation as more than half of Singaporeans said the government is not doing enough to handle inflation. 

Another research also showed that consumers are seeing inflation continue for another year.