Singapore and Britain agree ‘landmark’ financial services link-up; S’pore central bank target GDP growth above 6%

Singapore and former colonial power Britain had earlier this week announced plans to forge closer business and finance ties.

The Monetary Authority of Singapore (MAS) said the agreement, which was signed by Britain’s finance minister Rishi Sunak and MAS Chairman Tharman Shanmugaratnam, is based on “commitment by the UK and Singapore to build a more comprehensive and enhanced relationship in financial services.”

The British Treasury Department labelled the agreement “a landmark” which could “reduce burdens for firms.”

Sunak said the deal “will help increase investment and trade with Singapore and the Asia-Pacific region” while Shanmugaratnam said it would “provide a framework for the growth of new activities in both our markets.”

The announcement came after both sides had opened talks on what Britain said would be a “cutting edge” digital trade deal.

Singapore’s economy could beat forecasts and expand this year by over 6 per cent, the head of the central bank had announced.

According to Ravi Menon, Managing Director of the Monetary Authority of Singapore (MAS), growth “could exceed the upper end of the 4 to 6 per cent forecast range, barring a setback to the global economy.”

After a record gross domestic contraction of 5.4 per cent in 2020, a strong exports-driven rebound early this year has already set the wealthy city-state back on track, according to Menon.

“The Singapore economy had recouped in the first quarter of 2021 the aggregate output loss incurred during the pandemic,” he said.

Menon believes that expected high growth in China and US should help smaller economies such as Singapore, which depends heavily on trade and foreign investment.

“The strength of the rebound in the advanced economies should in turn provide a powerful tailwind for Asian economies, particularly those that are more actively engaged in global supply chains,” he said.