As much as 20% of Singapore’s economy faces “deep scarring” from the coronavirus pandemic from which they may not recover, says MAS’ Menon at a virtual event hosted by the Institute of International Finance on Monday (12 Oct).
“A big chunk of the rest may not go back to underlying potential pre-crisis for quite some time.”
Aviation and tourism industries are a worry, especially with an expected slow recovery in travel, Ravi Menon, managing director of the Monetary Authority of Singapore, said.
The pandemic will have a lingering impact on the aviation industry, Menon said.
“What is going to happen to that industry when the planes haven’t flown, the pilots haven’t flown for months on a stretch?” he said.
“It’s not like picking up after taking two months off. When you take two years off, it’s very different.”
Bloomberg reported Menon as saying that he’s aware of the risks of prolonging support, but the key is to taper the exit without pulling the rug out too suddenly.
Singapore hasn’t seen the full extent of the crisis yet, he said.
More bad loans and bankruptcies are expected through the start of 2021.
“In a funny sort of way, the pandemic has made us all a lot more sensitive and aware of how vulnerable we are to the forces of nature,” Menon said.