How has COVID-19 Impacted the Singapore's economy And the recommendations on reviving the economy

iiiiii •. 1. How has COVID-19 Impacted the Singapore's economy And the recommendations on reviving the economy.

[Audio] Along with three waves of epidemics, Singapore has been one of outstanding countries worldwide to control the covid efficiently. During the 1st wave in early 2020, the government took circuit breaker lockdown to reduce local transmission. After the infection and death rates stabilized, the government eased the restrictions to resume activities to recover economy During the second wave of Delta, Singapore tightened Covid restrictions after rise in local cases, but transformed their strategy from zero-covid to living with covid in later 2021 to deal with the pressure of slow economic growth and inflation..

[Audio] At the first stage, due to the impact of Covid and containment measures on the health and economy, Singapore's consumption and investment level as well as the output level had been destroyed, resulting in an economic recession, as indicated by the quarterly growth rate of GDP in Singapore dropped to the lowest rate of -13.3% in 2020 Q2. After that, the looser containments and government stimulus policies push the output level back to the original level, and further boost GDP upward..

[Audio] During the 1st wave of Covid, there was a surge to 3.8% in the unemployment due to the destroy of covid and strict restrictions on operation of business After that, the looser containments and government stimulus policies helped boost manpower demand and, thus pushing pack the rate into 2.6[ break]% But the supply of labour is destroyed seriously and the slow economic growth did not create enough new vacancies, which makes the unemployment rate increased again in later 2021.

[Audio] The fall in inflation between Q2 2020 was mainly driven by steeper declines in the costs of services and other goods After that, the inflation increased because the supply chain and labor supply had been destroyed during the covid and lockdown, but the demand was recovering, therefore price increased After a short stable stage due to the depressed demand by the second wave of the covid, the inflation kept increasing due to shortage in the supply and labor and the global inflation pressure.

[Audio] To curb the spread of Covid 19, most governments around the world implemented certain restrictions and policies to protect the wellbeing of the people in their country. Singapore is a financial hub and port and plays an important role for global trade. As a famous tourist destination, Singapore has been affected by the virus prevention measures such as travel restrictions, impacting both hospitality and tourism, and as a result has seen a decrease in visitor arrivals in 2020 due to the ongoing pandemic. Several hotels offered their facilities for Swab centres and quarantine facilities during the lockdown.

[Audio] -The level of severe COVID-19 cases has remained somewhat stable and due to the implemented measures, we can see a relatively flat doubling rate in Singapore compared to what we see in other countries. There has been an observed doubling every 22.5 days in the period of Jan- March 2020 and this can be attributed to the restrictions imposed by the Singapore government.. - The government bodies successfully launched COVID- 19 insurance coverage to provide some additional sense of security for visitors to Singapore, along with travel " bubble zones" ensuring people's safety...

[Audio] - Some financial measures and economic stimulus measures the government implemented to protect the economy against the steps taken to combat the pandemic which include: fiscal packages given to start up ventures, loan insurance, enterprise financing, temporary bridging of loans and risk sharing for SME's..

[Audio] Among its many initiatives and policies to protect the economy To incentivize job growth the government introduced the SG United Jobs and Skills Package to target creating 100,000 job opportunities including Traineeship for first time job seekers, Jobs in Private and public sectors and developed Skills to increase capacity of courses..

[Audio] We can see the drop in GDP in the economy of Singapore was the worst in over 20 years in 2020 where the GDP hit a -5.4%. Being a highly developed country, to avert job loss and unemployment the government was also able to include in their 2021 budget S$ 4.8 billion to be used towards public health and safe reopening measures including testing and vaccination,.

11. 7 assumptions and 3 stages of analysis. The 3-equation model.

IS’. Y’. 12. IS curve: negative aggregate demand for both sectors.

PS (p). E*. E'. 13. WS&PS curve: lower equilibrium price for labor Stage 1- Covid-19 and containment measures.

PC': E( Inflation)<target inflation. 14. PC curve: people expect lower inflation than the target.

IS’. Y’. 15. E*. IS& PS& WS curve: experienced positive supply shock.

PC'': E( Inflation)<target inflation. 16. PC curve: people expect higher inflation, still smaller than the target Stage 2- fiscal policy for firms.

IS’. Y’. 17. IS curv e: positive demand shock Stage 3- fiscal policy for households.

[Audio] G increase – employment increase–inflationary spiral.

1. 2. 3. Trade-off 1. “ The secret to Singapore’s effective management of the COVID-19 crisis has been its handling of three crucial tradeoffs .” - Economists in Singapore.

1. Trade-off 1: Lives vs Livelihoods. 2. Trade-off 2: Immediacy vs Incrementalism.

GDP 2020. 2020 In total, Singapore’s economy contracted by 5.4% in 2020.

[Audio] There are two recommendations to give. Currently, the big issue after the pandemic we expect is that the ever-increasing inflation rate might not align with the slower pace of GDP growth rate which has fallen compared to the previous quarter. Also, from the government's view, there would still be a risk of inflation arising derived from the increasing global demand and the supply cost pressures ( source)..

[Audio] Thus, the first suggestion we made is that it is significant to stabilize the price and reduce inflation. The central bank could take steps to tighten the interest rate to cool down economy so push back the inflation to the target level. As the 3-equation model states, a proper increase in interest rate will cut the demand down, shift IS curve left and bring unemployment equilibrium back to the original level on the supply side, and thus, manage inflation expectations to the target level..

[Audio] on the supply side, it is recommendable to accelerate the development of digitalized industries, such as E-commerce and smart logistics to boost economic growth. To deal with the problems in economy and labor recovery and industry trend, we refer to the Singapore's past policies and successful strategies performed by China government. As a conclusion, Singapore government need to guide the development of more resilient industries to create more employment and stabilize the supply. However, there are some risks in our analysis, for example, interest rate hikes are likely to make companies less willing to borrow to expand production and contribute to the instability in the financial markets. In summary, based on the relevant data and theoretical frameworks, we have analyzed how the pandemic has influenced the economy of Singapore and provide recommendations. Looking forward to our further study and thank you for listening!.

Picture 29. Picture 57. 25. Risks in our analysis.

ESB –. 26. R eference :. THANK YOU.