Singapore: According to Singapore Central Bank Chief Mr. Ravi Menon, policymakers across the world will be in firefighting mode for much longer as the global economy faces not one but four major uncertainties, including a recession next year.

Mr. Menon listed the severity of the recession, the medium path of inflation, the impact of geopolitics on markets and climate risk in portfolios as key risks to the global outlook.

The key question is how long the slowdown will last, said Mr Menon, managing director of the Monetary Authority of Singapore, in a speech at the Super Return Asia conference of private equity and venture capital enthusiasts, while adding that the length of the recession will depend upon how high and stable inflation is, in which case central banks have no choice but to tighten even more than markets predict.

Singapore, like many economies around the world, is dealing with inflation that is yet to pick up, a tight labor market, and a labor shortage which is creating headaches for businesses as they emerge from the pandemic.

Mr. Menon shared that medium-term inflation is likely to be higher than the recent good price gains, and the era of cheap money and cheap labor is likely to be over.

Singapore has managed to post relatively steady growth this year despite headwinds, with the average of 37 economists polled by Bloomberg since late August forecasting growth of 3.6 percent in 2022, after 8 percent last year. It will be one of the slowest developing regions in Southeast Asia.

At the same time, the heavily trade-dependent economy is vulnerable to a bleak global outlook, including a significant impact from weakening China, its number one trading partner. The global race to higher interest rates is putting additional pressure on the central bank to remain tight, even as the local currency underperforms local peers.

TECH WORLD: Google sued with a $25 billion claim for depriving newspapers of ad revenue