Transforming Singapore beyond the pandemic

DEPUTY Prime Minister Heng Swee Keat's FY2021 Budget statement focuses on building a stronger Singapore that is economically vibrant, especially as the Covid-19 pandemic has triggered mega-shifts in the global economic landscape. Indeed, Singapore's gross domestic product (GDP) growth has already been slowing down structurally even before the pandemic. The five-year average growth through 2019 came in at 2.9 per cent, below the global average of 3.4 per cent.

Businesses in Singapore are facing a multitude of challenges, including disruption from technological changes, rising global competition, regulatory changes and demographic shifts. This led to a decline in the return on equity (ROE) for the Singapore market, which reached a two-decade low in 2019.

In addition, about 35 per cent of firms listed on Singapore Exchange (SGX) were loss-making in the fourth quarter of 2019 - the highest level since the 2008-09 Global Financial Crisis. As a result of the weak profitability of firms, Singapore was one of the worst performing in Asia in 2020.