Singapore may gain economic edge over Hong Kong from diverging COVID-19 strategies

SINGAPORE (THE STRAITS TIME/ANN) – Singapore’s plan to live with the pandemic will be closely watched in the coming weeks.

If the Republic’s healthcare system is able to cope with the rising number of Covid-19 infections, economists said the next move will be opening up borders to foreign talent.

This would boost Singapore’s attractiveness as a trade and investment hub in the region and raise the city’s appeal as an alternative location for companies to set up their headquarters at a time when rival Hong Kong is showing signs of recovery, said Asia-Pacific senior economist at Natixis Tring Nguyen.

Hong Kong is catching up with Singapore’s pace of expansion for the first time since 2008, with gross domestic product (GDP) increasing 7.6 per cent in the second quarter over the same period a year ago. Economists polled by Bloomberg last week raised their growth forecasts for Hong Kong by 0.7 percentage point to 6.7 per cent this year, while the Singapore economy is expected to expand between six and seven per cent.

Senior Asia economist at Hong Kong-based Pictet Wealth Management Dong Chen said the different Covid-19 strategies pursued by the two governments will determine each city’s economic performance in the coming months.

While Hong Kong’s zero-Covid-19 strategy has so far been successful in keeping the case count low, overseas travel is costly and sometimes impossible.

In contrast, Singapore will gradually open its borders and avoid stringent containment measures, which should boost economic activities.

Singapore will gradually open its borders and avoid stringent containment measures, which should boost economic activities. PHOTO: THE STRAITS TIME/ANN