(Bloomberg) — Singapore’s economy avoided a recession in 2023 as Prime Minister Lee Hsien Loong warned of a “troubled” international environment that will weigh on growth and security.
Gross domestic product expanded 1.2%, Lee said in his New Year’s message, compared with the trade ministry’s forecast in November for an expansion of around 1%. For 2024, he reiterated an official projection for growth of 1% to 3%.
Lee called 2023 a “challenging year” where tensions between the US and China remain and the war in Ukraine is at a “strategic stalemate with no resolution in sight.” He pointed to global “revulsion and anger” over the human suffering in the Israel-Hamas conflict.
“For some years to come, we must expect the external environment to be less favorable to our security and prosperity,” Lee said. “Geopolitical uncertainties will continue weighing on the global economy.”
Lee, 71, has served as prime minister since 2004 and plans to hand over the reins to his deputy Lawrence Wong in 2024. In what is likely to be his final New Year’s message, he urged Singaporeans to extend their full support to the new leadership.
“This is not the first time we are having a leadership transition,” he said. “But transitions are always delicate. Singapore will come under close scrutiny. People near and far are watching to see how the new leaders bond with Singaporeans, and whether our small nation can remain successful and exceptional.”
Under Lee, Singapore’s per capita income has risen from about $27,600 in 2004 to $87,880 in 2023, making the tiny island nation one of the world’s richest places.
He has presided over one of the world’s most competitive economies, while helping the city state navigate the global financial crisis and the Covid-19 pandemic, and forge stronger relations with major powers such as the US and China as well as neighbors Malaysia and Indonesia.
Singapore’s outlook depends on a durable recovery in global trade, given that exports are equivalent to more than one-and-a-half times the size of the island’s economy. Although overseas shipments swung to growth for the first time in 14 months in November, gains were largely on account of a low year-ago base.
Lee said that while the economy grew in 2023, households are still feeling the pressure of higher costs of living even though inflation is gradually easing.
Taming inflation has been a top priority for policymakers since the city-state’s reopening post-pandemic. The government has announced support measures worth billions of dollars, while the central bank has kept the local dollar on an appreciating path to blunt imported inflation.
A 1 percentage point increase in the goods and services tax to 9% from Jan. 1 will add to price pressures, even as the premier said the extra revenue will help the government pay for growing healthcare expenses. Authorities will continue to provide monetary assistance and subsidies to cushion the impact, he said.
TORONTO – Canada’s main stock index was higher in late-morning trading, helped by strength in energy stocks, while U.S. stock markets also moved up.
The S&P/TSX composite index was up 34.91 points at 23,736.98.
In New York, the Dow Jones industrial average was up 178.05 points at 41,800.13. The S&P 500 index was up 28.38 points at 5,661.47, while the Nasdaq composite was up 133.17 points at 17,725.30.
The Canadian dollar traded for 73.56 cents US compared with 73.57 cents US on Monday.
The November crude oil contract was up 68 cents at US$69.70 per barrel and the October natural gas contract was up three cents at US$2.40 per mmBTU.
The December gold contract was down US$7.80 at US$2,601.10 an ounce and the December copper contract was up a penny at US$4.28 a pound.
This report by The Canadian Press was first published Sept. 17, 2024.
OTTAWA – Canada’s inflation rate fell to two per cent last month, finally hitting the Bank of Canada’s target after a tumultuous battle with skyrocketing price growth.
The annual inflation rate fell from 2.5 per cent in July to reach the lowest level since February 2021.
Statistics Canada’s consumer price index report on Tuesday attributed the slowdown in part to lower gasoline prices.
Clothing and footwear prices also decreased on a month-over-month basis, marking the first decline in the month of August since 1971 as retailers offered larger discounts to entice shoppers amid slowing demand.
The Bank of Canada’s preferred core measures of inflation, which strip out volatility in prices, also edged down in August.
The marked slowdown in price growth last month was steeper than the 2.1 per cent annual increase forecasters were expecting ahead of Tuesday’s release and will likely spark speculation of a larger interest rate cut next month from the Bank of Canada.
“Inflation remains unthreatening and the Bank of Canada should now focus on trying to stimulate the economy and halting the upward climb in the unemployment rate,” wrote CIBC senior economist Andrew Grantham.
Benjamin Reitzes, managing director of Canadian rates and macro strategist at BMO, said Tuesday’s figures “tilt the scales” slightly in favour of more aggressive cuts, though he noted the Bank of Canada will have one more inflation reading before its October rate announcement.
“If we get another big downside surprise, calls for a 50 basis-point cut will only grow louder,” wrote Reitzes in a client note.
The central bank began rapidly hiking interest rates in March 2022 in response to runaway inflation, which peaked at a whopping 8.1 per cent that summer.
The central bank increased its key lending rate to five per cent and held it at that level until June 2024, when it delivered its first rate cut in four years.
A combination of recovered global supply chains and high interest rates have helped cool price growth in Canada and around the world.
Bank of Canada governor Tiff Macklem recently signalled that the central bank is ready to increase the size of its interest rate cuts, if inflation or the economy slow by more than expected.
Its key lending rate currently stands at 4.25 per cent.
CIBC is forecasting the central bank will cut its key rate by two percentage points between now and the middle of next year.
The U.S. Federal Reserve is also expected on Wednesday to deliver its first interest rate cut in four years.
This report by The Canadian Press was first published Sept. 17, 2024.
FREDERICTON – New Brunswick‘s finance minister says the province recorded a surplus of $500.8 million for the fiscal year that ended in March.
Ernie Steeves says the amount — more than 10 times higher than the province’s original $40.3-million budget projection for the 2023-24 fiscal year — was largely the result of a strong economy and population growth.
The report of a big surplus comes as the province prepares for an election campaign, which will officially start on Thursday and end with a vote on Oct. 21.
Steeves says growth of the surplus was fed by revenue from the Harmonized Sales Tax and federal money, especially for health-care funding.
Progressive Conservative Premier Blaine Higgs has promised to reduce the HST by two percentage points to 13 per cent if the party is elected to govern next month.
Meanwhile, the province’s net debt, according to the audited consolidated financial statements, has dropped from $12.3 billion in 2022-23 to $11.8 billion in the most recent fiscal year.
Liberal critic René Legacy says having a stronger balance sheet does not eliminate issues in health care, housing and education.
This report by The Canadian Press was first published Sept. 16, 2024.
