Singapore’s Prime Minister, Lee Hsien Loong, delivered a comprehensive New Year’s Message, offering insights into the country’s economic performance and outlining key initiatives for the coming year. Despite facing economic challenges, the Prime Minister provided a measured outlook for the nation in 2024.
We Avoided A Recession
In his address, Prime Minister Lee acknowledged the economic challenges faced by Singapore in the past year. Despite the headwinds, the nation achieved a 1.2% growth, successfully avoiding a recession. He highlighted the resilience of the economy in the face of global uncertainties. Looking ahead to 2024, the Ministry of Trade and Industry (MTI) projects a GDP growth ranging from 1 to 3 percent. The Prime Minister expressed optimism that this growth would contribute to the nation’s continued economic stability.
While celebrating the economic resilience, Prime Minister Lee acknowledged that households continue to grapple with the pressures of a higher cost of living. He noted that inflation is gradually coming down, offering some relief. The Prime Minister expressed hope that the various assistance schemes implemented by the government have helped alleviate the financial burden on households.
GST Increase
A significant announcement in the New Year’s Message was the confirmation of the Goods and Services Tax (GST) rate increasing to 9 percent from January 1. The Prime Minister explained that this adjustment is necessary to generate extra revenue, which will be crucial in covering the escalating healthcare expenses resulting from the aging population. He emphasized the importance of ensuring the sustainability of public finances in the long term.
Assurance Package for Households
To ease the impact of the GST rate hike on households, the Prime Minister assured the continuation of the Assurance Package in the coming year. This package aims to provide support to households facing financial challenges, ensuring that those who need assistance receive it. Prime Minister Lee stressed the dual objective of supporting vulnerable households while maintaining the fiscal health of the nation.
Prime Minister Lee acknowledged that the economic and fiscal outlook for 2024 is contingent on the external environment. The nation’s performance will be influenced by global factors, and he urged citizens to stay vigilant in the face of uncertainties.
Snippet of PM Lee’s New Year Message
We made 1.2% growth this year, avoiding a recession. But households are still feeling the pressure of higher cost of living, though inflation is gradually coming down. I hope the Government’s many assistance schemes have helped to relieve the burden on households. Next year, MTI projects our GDP to grow by 1 to 3 percent, and inflation hopefully to come down further, but much will depend on the external environment.
From 1 January, the GST rate will increase to 9 percent. The extra revenue will help the Government to pay for growing healthcare expenses as our population ages. To cushion the impact, households will continue to receive the Assurance Package next year. This way, households who need help will get it, while we can keep our public finances sound and sustainable over the longer term.
Looking Ahead to 2024
For some years to come, we must expect the external environment to be less favourable to our security and prosperity. Geopolitical uncertainties will continue weighing on the global economy. In our own region, there are tensions and risks over rival claims in the South China Sea, and because of the cross-Strait situation. These can affect confidence in the region, and hence our growth.
At the same time, climate change will pose major challenges for every country. We are already feeling its effects. Singapore needs to adapt to and prepare for rising temperatures and sea levels, and to transition our economy to net-zero carbon emissions. It will be costly and demanding.
But we also have reason for hope and confidence. Rapid technological progress, especially in artificial intelligence and robotics, holds great promise for our businesses and people. The Government will work closely with businesses to upgrade and transform their operations, and with our tripartite partners to support every Singaporean to up-skill and re-skill, so that all can actively pursue their careers and keep themselves employable and competitive.
At the same time, we must always care for others in our community, and help those in greater need than ourselves. The Government will keep uplifting lower-income families and vulnerable groups, to enable them to live with purpose and dignity. We will continue to build affordable and accessible public housing for Singaporeans, a cornerstone of our social compact. To care for our ageing population, we are enhancing our physical infrastructure and social safety nets, and transforming our healthcare system with Healthier SG and Age Well SG. All these, and more, form part of the blueprint for a refreshed social compact.
The Forward Singapore agenda for Singapore is an ambitious one – especially as we will have to realise it in an era of rapid external and internal change. Many larger societies have become divided and weakened because difficult issues were not tackled directly and effectively, rival interest groups jostled against one another, and leaders put their own interests above the nation’s. As a small red dot, Singapore cannot afford to make the same mistakes and suffer the same consequences. We must work ever harder to keep our society together, and strengthen our sense of shared identity and nationhood.
Source: Prime Minister’s Office