Shanghai lockdown will not significantly affect Singapore’s supplies of food and healthcare essentials: MTI

Ms Low said with China being a major supplier to the world, a reduction in the country’s economic activity will inevitably lead to supply chain disruptions, especially delays in the fulfillment of manufacturing orders and shipping time.

“However, cargo is still able to leave from (the) Shanghai port and where necessary, is being redirected to other ports in China or other transport modes such as air,” she added.

Singapore’s key imports from China include electronics, machinery and metals, which are primarily intermediate goods required by firms in the manufacturing and construction sectors, Ms Low said.

“Based on the feedback from companies in these sectors, we understand that most of them have been able to cope with the delays in shipments from China thus far,” she told the House.

Still, the lockdowns in China, which are stressing already-frayed global supply chains, are likely to exacerbate global inflationary pressures in the near term. The longer-term effects will depend on the scale and extent of the lockdowns, as well as their impact on China’s economy, said Ms Low.

The Government recognises that rising cost pressures and higher frequency of supply disruptions have affected businesses, she noted. For instance, some businesses have had to hold higher inventory buffers to cope with the challenges and this will require more working capital.

To support firms with their cash flow needs, measures such as an extension of the Temporary Bridging Loan Program and the enhanced Trade Loan Scheme were announced in this year’s Budget.

In addition, the Monetary Authority of Singapore (MAS) has tightened monetary policy three times over the past six months. By doing so, the central bank is effectively allowing the Singapore dollar to appreciate.

This should also help moderate the pass-through effects of external inflationary pressures, Ms Low said.

.

Leave a Comment

Your email address will not be published.