Singapore leaders warn of trade fragmentation and global debt risks

Singaporean leaders and the International Monetary Fund (IMF) have issued warnings regarding increasing economic instability driven by trade fragmentation and rising global public debt.

Prime Minister Lawrence Wong noted that the global economy is shifting toward fragmentation as nations implement more trade barriers and industrial policies to protect domestic industries. He emphasized that Singapore must remain committed to an open-trade model and seek to act as a connector between regions, such as ASEAN, Latin America, Africa, and the Middle East, to avoid the risks of economic inwardness.

Separately, President Tharman Shanmugaratnam and IMF Managing Director Kristalina Georgieva highlighted the structural risks posed by mounting global debt. Georgieva stated that global public debt is nearing its highest levels since World War II and is projected to exceed 100 per cent of global gross domestic product. The leaders warned that elevated interest rates and high debt-servicing costs are making it increasingly difficult for governments, particularly in developed economies, to manage fiscal deficits and respond to future crises.