Gan Kim Yong outlines key constraints and strategic responses for continued growth
At the Ministry of Trade and Industry’s Economic Dialogue on August 30, 2024, Minister Gan Kim Yong warned that geopolitical tensions, disruptions, and domestic constraints would present significant challenges to Singapore’s economic growth. He highlighted the nation’s vulnerability amid global economic fragmentation, emphasizing three main drivers that will shape the future of its economy:
1. Geopolitical Tensions and Global Economic Fragmentation
Gan pointed out the tightening of US export controls on memory chips and chipmaking equipment to China, along with growing protectionist trends in sectors like electric vehicles, which add pressure to Singapore’s business environment. He stressed the fragility of managing relations with both the US and China, stating that global cooperation, especially on climate change, remains essential despite rising tensions.
2. Disruptions in the Operating Environment
The rapid advancement of technology, particularly artificial intelligence, is expected to reshape industries and introduce new disruptions. Gan noted that governments will face pressure to update regulatory frameworks and continue workforce development to keep pace with these advancements.
3. Domestic Constraints
Singapore’s ageing population, slowing resident workforce growth, and low fertility rates will limit the nation’s economic potential, especially as it navigates decarbonisation. Gan warned that an imbalanced approach to climate change policies could make the country either uncompetitive or fail to meet environmental targets.
Despite these challenges, Gan affirmed that Singapore would continue to invest in productivity, innovation, and workforce upgrades, while expanding its trade architecture to sustain growth in a complex global landscape.
