The ongoing crisis in Ukraine has resulted in several worrying consequences for Singapore, including inflation and skyrocketing prices.
Prime Minister Lee Hsien Loong addressed the concerning issue during his May Day Rally 2022 speech at the D’Marquee in Downtown East.
During his speech, PM Lee warned Singaporeans that economic challenges would likely increase in the coming months.
However, measures introduced during the Budget 2022 will help to cushion the impact of the war. The Government will also take steps to secure food and energy supplies to prepare for a worsening of the crisis.
On Sunday (1 May), PM Lee warned the public of the likely increase in inflation for the next few months due to the continuing crisis in Ukraine.
Noting the deteriorating situation in Ukraine, he said the impact on Singapore will likely worsen in the near future. Singaporeans are already feeling the impact of the war on the cost of living, with sharp spikes in electricity, petrol and food prices.
PM Lee gave the example of bread prices, which have increased due to a disruption to global food supplies.
Ukraine was one of the world’s largest exporters of cereal crops, but with the ongoing crisis, this supply was disrupted and will continue to be so in the near future.
Other economic challenges are also on the horizon as PM Lee projected that global growth would be weaker and there may be a recession within the next two years.
With that, PM Lee said the various new measures introduced during Budget 2022 would provide some relief to Singaporeans facing cost-of-living pressures.
This year, the Budget introduced the Household Support Package, which includes cost-saving aids such as U-Save rebates, CDC vouchers and S&CC rebates.
PM Lee has also reassured the public that lower and middle-income households who require more assistance will receive it.
He noted that the Monetary Authority of Singapore (MAS) had tightened its monetary policy to reduce imported inflation. As a result, the Singapore dollar has appreciated, allowing the prices of foreign goods to decrease for citizens.
Furthermore, Singapore will take steps to secure food and energy supplies if Ukraine’s situation worsens.
Despite the assistance from the government, PM Lee forewarned that Singapore might be hit hard by the oncoming economic challenges.
Given our small size, in world markets, we are always a price taker, we have very little bargaining power. If the prices go up, our prices go up; if supplies are short, we are squeezed. We cannot avoid these global headwinds.
In response to these challenges, PM Lee said Singapore should continue to remain open to the international economy.
Our strategy… is to stay open, to make our economy stronger, more resilient, and to keep on seizing opportunities for growth.
In addition, he urged Singaporeans to stay united in the face of the upcoming challenges.
The multiple warnings of tough times ahead should serve as enough warning for us that the next few months or years may not be easy.
In the face of these looming troubles, all we can do is stay resilient and plan our expenses wisely to prevent overspending. And if you haven’t had a habit of saving, it’s best to start now.
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Featured image adapted from the Prime Minister’s Office on YouTube.
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