Minister for Trade and Industry (MTI) Gan Kim Yong said shipping repercussions from Houthi rebel attacks in the Red Sea are "manageable thus far" for businesses, after being asked about the impact of shipping disruptions in the Red Sea on Singapore's economy and consumer prices.

Gan was responding to questions asked by Members of Parliament (MPs), Saktiandi Supaat and Darryl David during a parliamentary sitting on Feb. 5, 2024.

Shipping lines have been re-routed

The Red Sea trade route is one of the main trade routes between Asia, the Middle East and Europe.

It is also the shortest shipping route between Europe and Asia.

Gan said, "major shipping lines have re-routed long-haul trans-Pacific and Asia-Europe services via the Cape of Good Hope, which adds 10 to 15 days of transit."

Some imports that are typically transported via the Red Sea from Europe have been delayed due to recent attacks, including petrochemicals, specialty chemicals and machinery.

Shipment charges have also been raised.

Businesses have said "these repercussions are manageable thus far," Gan added, "as the proportion of goods that are shipped from Europe by sea is small compared to Singapore’s total global imports."

Singapore's economy predicted to grow by 1% to 3%

Gan also noted that Singapore's economy is expected to grow by 1 per cent to 3 per cent this year.

He added that MAS Core Inflation is expected to moderate to 2.5 per cent to 3.5 percent, compared to 4.2 per cent last year.

Gan said this is because global energy prices, food commodity prices, and the costs of most other imported goods have fallen.

Economic forecasts have accounted for the current Red Sea issue.

He also warned to expect additional downside risks to GDP growth and upside risks to inflation if the conflict in the Red Sea escalates.

Gan concluded that MTI will continue to monitor developments closely, including engaging with Singapore's business community.

SAF not involved in US and UK strikes: Ng Eng Hen

Minister for Defence of Singapore Ng Eng Hen also clarified that the Singapore Armed Forces (SAF) was not involved in strikes by the United States and United Kingdom on Houthi sites in Yemen.

He was responding to MP Zhulkarnain Abdul Rahim on the risk of conflict escalation from the US and UK strikes on Houthi sites in Yemen.

The strikes by were carried out under Operation Poseidon Archer, according to the US Central Command.

This should not be confused with Operation Prosperity Guardian, of which Singapore is a part.

Operation Prosperity Guardian is a multinational coalition formed to protect shipping vessels in the Red Sea against security threats.

The Singapore Armed Forces (SAF) deployed a team from the Republic of Singapore Navy's Information Fusion Centre to support information sharing, and a team of planners to work with international partners on operational plans. A senior national representative was also sent to the Combined Maritime Forces' headquarters in Bahrain.

Operation Prosperity Guardian is consistent with international law and aligned with Singapore's interests

Ng explained, "SAF participates in multinational operations which are consistent with international law and when aligned with our national interests."

Ng also urged Houthis to stop their unlawful attacks in the Red Sea to avoid an escalation in conflict, citing United Nations Security Council Resolution (UNSCR) 2722.

The resolution, adopted on Jan. 10, 2024, called for the Houthis in Yemen immediately cease all attacks on merchant and commercial vessels, "which impede global commerce, undermine navigational rights and freedoms, as well as threaten regional peace and security."

The Houthis have escalated attacks on commercial ships since November 2023, following the Israel-Hamas war in Gaza.

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