Singapore said that the impact of the war in Ukraine will be “significant” over time as it disrupts global supply chains and energy costs, according to Minister for Trade and Industry Gan Kim Yong.
The country will be “significantly impacted” by rising energy cost as it imports most of its energy needs, Gan said in a statement in response to a parliament query.
It has already seen a spike in the global prices of oil and natural gas, which Russia is a major exporter of, he said. The war will also further strain global supply chains, as Russia and Ukraine are major exporters of commodities such as wheat, and metals like nickel and palladium, according to Gan.
“The longer-term and indirect impact of the Ukraine conflict on Singapore will be significant,” he said.
In view of likely supply chain disruptions, Singapore is working with its key companies to review their business continuity plans, in order to minimise hits to their operations. Gan pointed out that supply dislocations for commodities will raise prices of goods that use them as intermediate input, such as the supply of nickel for stainless steel in the manufacturing and construction sectors, or palladium in the semiconductor industry.
Still, Gan also said that the immediate and direct impact on its economy and firms has been manageable for now, since Singapore companies have limited presence in Ukraine and the country doesn’t import many essential supplies from Ukraine and the region.