Singapore carries out social distancing measures to prevent the spread of COVID-19 (Photo: Xinhua/VNA)Singapore (VNA) - Singapore's economy is on track torecover from the worst recession in its history caused by the COVID-19epidemic, but potential risks still exist.
There are currently four threats to the Singapore economy, ofwhich the threat of a new COVID-19 variant is present. The raging Delta varianthas caused many countries to tighten their safety measures this year and thisis still affecting many Singaporeans.
UOB Group economist Barnabas Gan said Singapore's economicoutlook will depend on the COVID-19 situation and any outbreak could pose risksto the country's economic recovery.
Meanwhile, inflation and a decline in global demand for electronics –the key export of Singapore's manufacturing sector are two other potentialthreats. As Singapore economic growth gains momentum, the risk of inflation is skyrocketing. Higher-than-expected inflation could prompt major central banksto reverse interest rate cuts to historic lows, where tight monetary policiescould cause a slowdown in demand and global investment flows.
Currently, Singapore's exports of semiconductors and otherhigh-end electronic components have been growing at an impressive rate withelectronics exports in June increasing by 25.5 percent. However, if there are signsof a drop in demand, electronics manufacturers are to cut production andthereby lead to shortage in microchips and other components. The shortage in the globalsupply of semiconductors could limit the increase in electronic goods output.
In the context of the uncertain labour supply due to the COVID-19 epidemic, the construction sector faces ashortage of human resources as well as raw materials./.
