Singapore’s national election on 3 May marks Prime Minister Lawrence Wong’s first major electoral test amidst significant economic challenges.
According to Moody’s Analytics, the election occurs as Singapore navigates uncertainties from a US-China trade war that threatens the global trading system crucial to its economy since 1965.
Domestically, the ruling People’s Action Party (PAP) confronts issues such as high living costs, housing supply, and job security.
The Workers Party, the largest opposition, aligns with the PAP on addressing US tariffs and economic uncertainties but differs on extending social safety nets and job security for the domestic workforce. Pre-election polls suggest a strong likelihood of the PAP retaining power, though opposition parties might gain additional seats. However, political gridlock is unlikely, as most legislation can pass with a simple parliamentary majority.
Moody’s Analytics economist Heron Lim notes that the PAP will face an acute economic slowdown in 2025, necessitating stabilisation policies, especially if the economy contracts further in the second quarter. Lim emphasises that the most significant risk remains the potential escalation of the trade war, which could increase uncertainty and threaten investments and exports in Singapore.
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