With uncertainty looming large over global economy outlook, continue to expect gross domestic product growth of at least 4 per cent to 6 per cent this year, barring unforeseen circumstances, said Finance Minister Lawrence Wong yesterday.
Noting that the global outlook depends critically on the path of the pandemic, he said a faster-than-anticipated global vaccine roll-out and effective pandemic containment could boost growth prospects
On the other hand, there are many downside risks, including the threat of new waves of infections, which could force a return to lockdowns in some jurisdictions, and a slower timeline for the reopening of borders, he said.
"As a small open economy, Singapore's outlook depends crucially on these external developments. The uncertainty surrounding our economic outlook is therefore larger than usual."
In May, the Ministry of Trade and Industry maintained its growth forecast for this year at a range of 4 per cent to 6 per cent
But the recovery will be uneven across sectors, said Wong.
Outward-oriented sectors, which account for about 70 per cent of the economy, are projected to benefit from the pickup in external demand.
The construction, marine and offshore engineering sectors are not short of projects, but they face a severe manpower crunch due to the COVID-19 restrictions.
While the Government has provided foreign worker levy rebates and other support measures to help cushion the blow, these cannot fully make up for the shortage of workers, he said.
He observed that recovery will be more gradual in hard-hit sectors such as aviation and tourism, as it will take a longer time for international air travel volumes to return to pre-COVID-19 levels.
There may be some consolidation in these industries, he said, and the Government will do its part to re-skill the affected workers and help them transition to other growing sectors that need manpower.
"At the same time, we will continue to provide targeted support for these industries to preserve their core capabilities and position them for recovery, which will come when travel restrictions are eventually lifted."
Wong said there has been feedback from the business and investment community that Singapore might lose out to other hubs that are moving more aggressively to reopen their borders.
"To achieve these goals, we will need strong partnerships across the community, private, and public sectors. Our experience throughout this pandemic has shown that we are stronger and more effective when we are united and work together."