Singapore could take action to tackle higher costs arising from war in Ukraine: Wong

SINGAPORE is closely watching external economic risks to growth and inflation, and will not hesitate to take steps to protect jobs and to help with higher costs, Finance Minister Lawrence Wong said on Wednesday (Mar 2), in the wake of Russia's invasion of neighbouring Ukraine.

While Singapore's direct trade ties with Russia and Ukraine are relatively small, he noted in his Budget round-up speech that the conflict will impact the global economy and energy markets.

Efforts are already under way to enhance energy supply resilience, and the Republic is also tackling inflation and its impact on businesses and households, Wong observed.

He had flagged tensions in Eastern Europe as one of the risks to Singapore's economy in his Budget Statement on Feb 18, and pointed out that "the situation has escalated sharply" since.

"We are monitoring the external situation and the risk for our economy closely - risks in terms of both growth and inflation. If the situation worsens, we will not hesitate to take further actions to protect jobs and to help households and businesses deal with increased costs," Wong told the House.

Still, he added: "Notwithstanding these near-term uncertainties in the external environment, our overall prospects are good. We are operating from a position of strength and that is why we can make bold moves now, which will position us well to seize the opportunities ahead."

People's Action Party MP Seah Kian Peng (Marine Parade GRC), who is also NTUC Enterprise group chief executive, recently told Parliament that the conflict in Ukraine will add further cost pressures to businesses, since Ukraine is a major supplier of sunflower seeds and sunflower oil, as well as a major producer of corn, which is needed for livestock feed and egg production.

Singapore has strongly condemned Russia's invasion of Ukraine as a violation of international norms, and co-sponsored a United Nations Security Council resolution on the matter as well.

Earlier this week, Foreign Minister Vivian Balakrishnan announced that Singapore will impose export controls on items that are potential weapons, and will also restrict certain financial transactions connected to Russia.