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<\/div>Singapore\u2019s prime minister warned Friday that economic growth will slow this year and some countries may slip into recession as the Middle East crisis keeps the Strait of Hormuz closed.<\/p><\/div>\n
In a May Day speech, Lawrence Wong said the war was not expected \u201cto be over anytime soon\u201d and supply disruptions may worsen in the months ahead.<\/p>\n
Shipping through the strait, which handles a fifth of global oil and gas, has been effectively stopped since the United States and Israel began bombing Iran on Feb 28.<\/p>\n
\u201cHere in Asia, we are especially affected because of our high dependence on energy and other critical supplies from the Gulf,\u201d Wong said.<\/p>\n
Some regional countries are already facing fuel shortages, airlines have cut flights and factories are reporting delays, he said.<\/p>\n
\u201cGlobally, inflation will rise, spreading from energy to food and then other essentials. Some economies may well slip into recession, and Singapore will feel the impact directly,\u201d he said.<\/p>\n
\u201cOur growth this year will slow, and inflation will be higher, and all this will put real pressure on businesses, workers and households.\u201d<\/p>\n
He did not give any figures, but the trade ministry in February said it expected the economy to expand 2.0-4.0% this year, a bump from its previous forecast of 1.0-3.0%.<\/p>\n
\u201cWe must brace ourselves and be prepared for a more difficult period ahead. And I want to be upfront with all of you so that we are mentally prepared,\u201d he said.<\/p>\n
Singapore, however, is dealing with the crisis from a position of strength because of policies it implemented in the past to build energy resilience, including being a major oil refining hub and energy trading centre.<\/p>\n
Even if the Strait of Hormuz reopens, a return to normal will likely not be immediate, Wong warned.<\/p>\n
\u201cPorts and energy infrastructure have been damaged. Shipping lanes will need to be cleared of mines,\u201d he said.<\/p>\n
\u201cConfidence must be restored that it is safe for ships to sail through, that insurance can be obtained, and people are prepared to take risks to go through the Strait.\u201d<\/p>\n<\/div>\n