To The Moon

Singapore on Thursday reaffirmed its 2022 economic growth forecast, and boosted its reading for last year, as its recovery from the pandemic stabilizes and it seeks to ease virus restrictions.

Gross domestic product is projected to expand 3% to 5% this year, the Ministry of Trade and Industry said, reiterating its November estimate. It also upgraded 2021 growth to 7.6%, from an earlier 7.2%.

That growth pace could get a kick as the city-state aims to ease travel and social restrictions after the current wave of Covid-19 infections passes, potentially bolstering the still-struggling travel and retail sectors.

It also comes one day before the closely watched budget presentation, which is expected to steer finances back toward a fiscally conservative stance and a modest budget surplus, with potentially the most aggressive tax increases in years.

Prospects for “outward-oriented” sectors such as manufacturing and trade will remain strong this year amid the global recovery, the ministry said in a statement, while aviation and tourism-related activity is expected to slow amid risks for recurring Covid-19 outbreaks.

The trade ministry also flagged downside risks from slowing external demand, particularly from the U.S., Europe and China, citing concerns over supply chain bottlenecks, higher energy prices and the potential for financial instability amid tightening monetary policies in some countries.

Authorities are also already facing the sharpest rise in headline consumer prises in eight years, which forced a surprise tightening of monetary policy last month by the central bank.

The final reading for last quarter was growth of 6.1% from the same period last year, compared to the government’s advance reading of 5.9% and a median 6.2% in a Bloomberg survey.