The rise of the Asian middle class will help Singapore cope with headwinds from the global economy, a top official in the city state told Bloomberg.
Even though Singapore’s economy is coming under strain, observers shouldn’t discount positive signs, including resilient consumer spending in Southeast Asia and solid increases in air traffic at the Changi international airport, a regional hub, Economic Development Board (EDB) chairman Beh Swan Gin said Monday.
Beh said Singapore businesses can take advantage of economies set to benefit from young and growing populations and urbanization, such as the Philippines and Indonesia.
While some countries in the Association of Southeast Asian Nations are facing political uncertainty, that won’t necessarily detract from the growth outlook as long as they keep their economies open and follow market-friendly policies, he said.
“We are generally optimistic about the medium to long term,” Beh said.
“ASEAN, despite all the political uncertainties, is coming along at a pace of economic growth of around 5 percent.”
The EDB was formed in 1961 to help attract foreign investors, with a focus on boosting the country’s manufacturing industry.
Growth in the export-oriented economy was flat in the first quarter of this year, while the central bank provided support to the sector by announcing it won’t seek currency appreciation.
Beh said the policy easing by the Monetary Authority of Singapore was probably aimed at improving the competitiveness of businesses.
“I think MAS was worried about the cost structure,” he said.
“We are a small country, international trade is a big part of the economy, so if our cost structure is no longer competitive, the currency is a big reason.”
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