(Bloomberg) — Singapore’s Lawrence Wong will have to make fighting inflation his top priority after he takes over as prime minister next month, according to most economists in a Bloomberg survey.
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The cost of living remains the top concern for Singaporeans, while core inflation is still high, nine out of 12 respondents said in the survey on the leadership transition scheduled for May 15.
While Singapore’s central bank has kept monetary policy tight, allowing the local dollar to appreciate and tame imported inflation, the government has also taken measures to buffer costs for households.
Core inflation accelerated to 3.6% in February, slightly above the 2.5%-3.5% range forecast by the Monetary Authority of Singapore for 2024. The MAS expects price increases to remain high in the first part of the year, before easing in the fourth quarter and easing into 2025 – by the time elections are due to be held.
The ruling People’s Action Party’s 2020 election performance was the worst in terms of parliamentary seats since the country’s founding, despite remaining dominant.
Forging friendly ties with the US and China, the world’s two largest economies, and boosting trade were seen as the next top priorities in that order, according to the survey results.
While a stronger Singapore dollar makes imports cheaper, it affects the city-state’s export competitiveness as the value of outbound shipments exceeds the size of the island’s economy. Singapore’s domestic exports, excluding oil, fell in two of the three months for which data is available this year.
The need to balance employment for local workers with foreigners was the fourth most important task for Wong and his team. All respondents expect stability and policy continuity as the leadership change was well telegraphed.
–With help from Karthikeyan Sundaram.
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