The economic damage caused by the coronavirus pandemic has seen second quarter output collapse by a record 42.1%, with the construction and tourist sectors – collectively comprising an eighth of total GDP – hit hardest.
As a result, MAS’ priorities have been focused on keeping the exchange rate stable to provide an anchor of confidence alongside measures to keep funding and credit markets liquid.
And while Menon describes the economic situation as ‘dire’, where any recovery ‘is likely to be slow and uneven’ resulting from secondary waves of infection, Singapore’s financial system has demonstrated ‘sound business continuity planning’ and has operated with ‘minimal disruption’.
Menon further revealed that despite a contracting economy, the financial sector is set to grow in 2020 and offered further optimism on the outlook for Singapore in a post-COVID world.
Singapore’s ‘deep connectivity to Asia’ will capitalise on accelerated growth as the wider continent and region begin to increase economic activity, the Managing Director of MAS noted. ‘The high degree of digitalisation’, assisted by widespread remote working across industries and leading to a future competitive advantage, was also highlighted.
Menon concluded his press conference stating ‘our odds are better than good’.