Economists polled by Reuters expect Singapore’s economic growth to cool down in Q4 2021 as a result of worries about the Omicron variant. According to the poll, Singapore’s GDP between October and December is expected to come in at +5.4% YoY, sliding lower from the 7.1% growth seen in the third quarter of the year.

In addition, Singapore’s economic outlook will depend heavily on how the global economy recovers from the pandemic inflicted crisis. The island nation depends heavily on international trade and its GDP will be driven by how its key trade partners’ economies fare post the COVID-19 crisis in the coming year.

According to official estimates, Singapore’s GDP for 2021 could come in at around 7% and ease lower to 3-5% in 2022. Analysts sound more pessimistic, however, anticipating a growth of 6.8% in 2021 instead.

The spread of the Omicron variant has caused Singapore’s authorities to clamp down on international travel, lending a huge blow to its tourism sector – one of the key contributors to its economy. This is despite the fact that it enjoys one of the highest vaccination rates in the world, having vaccinated around 87% of its population and issued booster doses to around 38% of its population till date.

Singapore’s central bank, the Monetary Authority of Singapore (MAS), had resorted to monetary tightening measures in its October meeting amid rising inflation weighing on its economic recovery. Economists widely expect another round of monetary tightening in April 2022, also on account of inflationary pressures.