ArrowArtboardCreated with Sketch.Title ChevronTitle ChevronIcon FacebookIcon LinkedinIcon Mail ContactPath LayerIcon MailPositive ArrowIcon PrintIcon Twitter
Economy

Singapore gears up for wider reopening despite record COVID cases

City-state keeps 3-5% GDP target as boosters cover 64%, most infections mild

Tourists in the early days of the pandemic: The government plans to soon increase its quota for vaccinated travelers, and eventually open up to all countries.   © Reuters

SINGAPORE -- Singapore plans to push its economic reopening in the coming weeks, as it aims to accelerate its recovery from the COVID-19 downturn despite a growing number of infections.

The city-state, which months ago decided to "live with COVID," plans to allow more business and social activity, as well as more inbound travelers. This would help offset the impact from external factors such as rising energy prices and a supply chain crunch.

On Thursday, the government maintained its growth forecast for 2022 in a range of 3% to 5%, previously announced in November before the omicron variant emerged.

That compares to a growth rate of 7.6% for 2021 in revised data released the same day, up from the original 7.2%. For 2020, the government upgraded its figure to a 4.1% contraction, from the previously reported 5.4% fall.

"Domestically, our high vaccination rate and steady rollout of booster shots should facilitate further progressive easing of domestic and border restrictions," the Ministry of Trade and Industry said in a statement, commenting on its economic outlook for the rest of the year.

The quarterly update comes on the heels of a new COVID-19 infection record this week, as omicron tears across the region including Indonesia, Malaysia and Vietnam.

Singapore saw an all-time high 19,420 daily cases on Tuesday. Wednesday's tally came to 16,883, while total infections since the start of the pandemic crossed the 500,000 mark that day. That means nearly 1 in 10 of the city-state's population of about 5.45 million has been infected.

The government has warned that cases could climb even higher in the weeks ahead. Still, over 99% of the infections detected over the past four weeks have been mild or asymptomatic, and the authorities plan to press forward with reopening rather than reverting to tighter restrictions.

By early March, the government intends to increase the daily entry quota for its quarantine-free "vaccinated travel lanes" for people coming by air from about 25 countries, from 5,000 to 15,000. It will also expand the program to Qatar, Saudi Arabia and the United Arab Emirates on Feb. 25, following deferments in December due to omicron.

"As Singapore's incidence rate is now comparable with most overseas destinations, imported cases are unlikely to affect the trajectory of local cases," the Ministry of Health said on Wednesday. "Our focus has thus shifted to facilitating inflows [of] travelers who are less likely to become severely ill and burden our health care capacity while they are in Singapore."

During a news conference on Wednesday, Health Minister Ong Ye Kung went so far as to signal a coming "fundamental change" to the travel schemes, where the country ultimately allows quarantine-free entry for fully vaccinated arrivals from anywhere.

"Instead of having vaccinated travel lanes with selected countries that we think are low risk, we should actually allow [quarantine-free] travel for fully vaccinated travelers from all countries," he said. "We should make this transition, not now, but after the omicron wave has peaked and started to subside."

As for domestic rules, some will change starting Feb. 25. Safe distancing between individuals will not be required if they all wear masks, although maintaining 1 meter of space will still be encouraged.

In addition, the authorities will lift size limits for events such as funerals and wedding receptions.

Backing the government's decisions despite high infections is the country's high booster vaccine coverage: 64% of residents had received third shots as of Tuesday, according to the Ministry of Health. This is believed to be a key reason so few cases are severe.

According to the economic data released Thursday, Singapore's economic rebound last year was mainly driven by the manufacturing sector, which grew 13.2% thanks to global demand for electronics. In contrast, some sectors, including the aviation and tourism industries, remained weak due to travel restrictions.

While the government plans a further resumption of economic activity, it also raised downside risks such as inflation, supply chain disruptions, slower growth in China and the U.S., and monetary policy tightening in the advanced economies. "In particular, large capital outflows from regional economies with high dollar-denominated debt levels could lead to tighter financial conditions and derail growth in these economies," it said.

Sponsored Content

About Sponsored Content This content was commissioned by Nikkei's Global Business Bureau.

Nikkei Asian Review, now known as Nikkei Asia, will be the voice of the Asian Century.

Celebrate our next chapter
Free access for everyone - Sep. 30

Find out more