Singapore Economy Likely to Be Surpassed by Hong Kong for the First Time in 13 Years

[Asia Economy Reporter Yujin Cho] Singapore, where the spread of COVID-19 is intensifying due to the Delta variant, is expected to record a lower economic growth rate than Hong Kong for the first time in 13 years.

On the 9th (local time), Bloomberg News revised Hong Kong's economic growth rate for this year upward by 0.7 percentage points to 6.7%. This is 2 percentage points higher than Singapore's expected economic growth rate of 6.5%.

If this analysis materializes, Hong Kong will achieve a higher economic growth rate than Singapore for the first time since 2008.

Compared to last year, when both Hong Kong (-6.1%) and Singapore (-5.4%) recorded negative growth due to the direct impact of COVID-19, this represents a significant rebound.

Gary Ng, senior economist at Natixis, said, "The Hong Kong economy is expected to show a rebound this year," adding, "Especially supported by the recovery in the private consumption sector, the growth rate could be raised by 0.5%."

Although Singapore has surpassed an 80% completion rate for the second dose of the vaccine, the number of new confirmed cases has recently surged as the highly contagious Delta variant continues to spread.

On the 7th, Singapore's new COVID-19 cases exceeded 300, marking the highest number since August 5 last year.

This is about three times higher than a week ago and is the largest scale since the COVID-19 outbreak began early last year.

However, economist Gary Ng added that if the border closure status is maintained due to the spread of COVID-19, Hong Kong's economy could face significant challenges next year.

According to Natixis' own survey, Singapore's economic growth rate next year is expected to be 4.1%, surpassing Hong Kong (3%) again, and this trend is expected to continue in 2023.