SINGAPORE: Singapore companies, households and the financial sector should stay vigilant and prudent amid “considerable uncertainty” from the COVID-19 pandemic, the Monetary Authority of Singapore (MAS) said on Monday (Dec 6).

So far, the local financial system has been resilient as existing buffers and “exceptional” government measures provided “critical support”. The subsequent economic recovery and accommodative domestic financial conditions also helped to shore up overall resilience, the central bank said in its annual financial stability review.

The pandemic “will continue to be a source of considerable uncertainty”. While authorities are expecting the Singapore economy to grow between 3 per cent and 5 per cent next year, renewed COVID-19 outbreaks around the world and re-imposition of mobility restrictions could disrupt economic activity again, the MAS said.

This may result in renewed job losses and concerns about the viability of corporates.

The consequent increase in global risk aversion could also cause a tightening in domestic financial conditions, reducing the flow of credit to the economy. These stresses could be exacerbated if global financial conditions were to also tighten significantly in response to persistently higher inflation….

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