2_singapore-economic-roundtable-covid-crosscurrents_dr-taimur-baig.pdf

this summarize economic strategy

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Singapore Economic Roundtable
Covid’scross-currents
Taimur Baig, PhD, Chief Economist
Economics and Strategy, Group Research
May 2021

2. Wide divergence in policy stringency
2
Singapore in Covid’scross-currents
Composite measure based on nine response indicators including school closures, workplace closures, and travel bans, rescaled to a value from 0 to 100. (100 =
strictest). If policies vary at the subnational level, the index is shown as the response level of the strictest sub-region.0
20
40
60
80
100
18-Jan18-Feb18-Mar18-Apr18-May
Mainland China Hong Kong
South Korea Taiwan
Vietnam
Source: University of Oxford,DBS
Stringencyindex 0
20
40
60
80
100
18-Jan18-Feb18-Mar18-Apr18-May
India Indonesia
Malaysia Philippines
Singapore Thailand
Source: University of Oxford,DBS.
Stringencyindex

3. Mobility getting affected
3
Singapore in Covid’scross-currents-70
-60
-50
-40
-30
-20
-10
0
10
20
Jan-21 Feb-21 Mar-21 Apr-21 May-21
Hong Kong India Indonesia
Malaysia Philippines Singapore
South Korea Taiwan Thailand
Retail andRecreation
Source: Community mobility reports, DBS. February16, 2020 = 100
5working day ma

4. SARS-CoV2 mutations
4
Singapore in Covid’scross-currents
Variants of concern Emerged in Status
B.1.1.7 UK 50% more infectious than the common
strain; 35% more deadly
B.1.351 South AfricaReduced effectiveness of some
vaccines
P.1 Brazil Similar mutation to B.1.351
B.1.167 India Appears to highly infectious and may
be displaying vaccine resistance
•Mutations: Copying errors from an infected cell
•Variants: Share the same inherited set of mutations

5. Vaccination and herd immunity
5
Singapore in Covid’scross-currents8.4
13.3
16.5
19.3
25.2
29.3
54.7
82.9 84.0
3.5 3.1
6.8
9.3
15.1
25.3
37.5
30.8
IndonesiaIndiaRussiaWorld BrazilChinaSingaporeUSA UK
Vaccination rate
Doses administeredFully vaccinated
% of population
Source: CEIC, DBS. Data through May 17, 2021

6. Is herd immunity a mirage?
6
Singapore in Covid’scross-currents
Substantially vaccinated societies are experiencing sharp drops in
infections, hospitalisations, and deaths
But there are numerous complicating factors:
•Vaccine hesitancy
•Virulent variants
•Children
•Developing countries
•Vaccine rationing

7. Inflation expectations are normalising
7
Singapore in Covid’scross-currents-1.0
0.0
1.0
2.0
3.0
4.0
5.0
2018 2019 2020 2021
One-year-ahead
inflation expectations
DBS-SKBI CPIEx One-Year-Ahead
DBS-SKBI Core CPIEx One-year-Ahead
Current CPI-All Item Inflation
1-yr-ahead MAS SPF
%yoy
Source, DBS, SKBI-SMU

8. Inflation expectations and bond yields
8
Singapore in Covid’scross-currents-0.5
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
4.5
2018 2019 2020 2021
Inflation expectations
and bond yield spread
DBS-SKBI CPIEx Five-Year-Ahead
SSB Yield Spread (10yr-1yr)
%
Source, DBS, SKBI-SMU

9. Covid’sscar
9
Singapore in Covid’scross-currents100
110
120
130
140
150
160
170
180
190
20102011201220132014201520162017201820192020202120222023202420252026
Real GDP
Trend (2010-19)
Source: IMF April 2021 WorldEconomic Outlook, DBS
Projections
13%

10. Policy direction
10
Singapore in Covid’scross-currents
Near-term
•Timing of GST
•Delayed credit risk
•Business continuity signal to investors
•Fallout from crypto and tech correction
•Fiscal support for SMEs and households
•MAS vigilance toward next taper tantrum

11. Policy direction
11
Singapore in Covid’scross-currents
Long-term
•Fin-tech
•Food-tech
•Health-tech
•Climate change
•High-end services (from Netflix to TikTok)
•High-end manufacturing (lobby Intel, TSMC, Foxconn?)

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