SINGAPORE - While war and global inflationary pressures are responsible for the current increase in prices here, carbon and labour are set to be permanent constraints for Singapore's economy, Finance Minister Lawrence Wong said on Monday .
He highlighted several factors that contributed to rising global prices in 2021, such as expansionary macroeconomic policies adopted by major economies such as the United States and the euro zone to stimulate economies amid the Covid-19 pandemic, supply chain pressures and demand for energy outstripping supply.
"But we must be prepared for a prolonged conflict, or even further escalation, which will cause further supply disruptions and additional inflationary pressures," he cautioned. But these central banks also face a difficult dilemma in needing to balance between economic growth and reining in prices, he said.
"Monetary policy will continue to do its part to ensure medium-term price stability," he said, adding that the MAS is watching closely the impact of geopolitical- and pandemic-related shocks on the Singapore economy and inflation, and will be putting out its monetary policy statement later this month as scheduled.
To help businesses deal with current challenges, the disbursement of the Small Business Recovery Grant, which provides one-off cash support of up to $10,000 for small and medium-sized enterprises most affected by Covid-19 restrictions over the past year, will be brought forward, Mr Wong said.
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