In his speech for the National Day rally titled ‘A Better Home, A Brighter Future’, Lee said: “Singapore feels acutely the pressures mounting all around us”.
The prime minister earlier delivered his speeches in Malay, followed by Mandarin.
Lee said the rivalry between the US and China affected every country and region in the world, and that their mutual wariness and distrust had deepened.
“The rest of the world has to tread a careful path, to avoid being caught in the crossfire,” he said.
Concerned about the raging war in Europe, Lee stressed that Russia’s invasion of Ukraine was a continuing human tragedy and an assault on international norms and values.
“It is a cautionary warning to the rest of the world never to take peace for granted, and a reminder to us of the vital importance of a strong Singapore Armed Forces,” he said.
Lee added that global economic order was fraying and that the concept of globalisation was weakening.
“Supply chains are splitting up. Countries are layering on multiple protectionist measures. This hurts all countries, especially small, open trading nations like ourselves,” he said.
Lee said the world was also experiencing more extreme weather due to global warming.
“From China and Japan to Europe and the US, no region is spared from floods and droughts, heatwaves and wildfires.
“This will affect food production and prices worldwide. We have not fully felt it in Singapore yet, but it is coming,” said Lee, adding that economically, Singapore was keeping up.
The prime minister said he expected positive economic growth this year and hopefully, no recession.
“Inflation is, at last, coming down, but it will probably stay higher than what we were used to. The cost of living is still on everyone’s minds.
“We will weather this storm together,” he assured.
On Aug 11, the republic’s ministry of trade and industry (MTI) narrowed the 2023 GDP growth forecast range to 0.5-1.5%, as the external demand outlook remained weak.
This is down from the previous forecast range of 0.5 to 2.5%.
Meanwhile, on July 24, MTI and the Monetary Authority of Singapore said for 2023, as a whole, headline and core inflation were projected to average between 4.5% and 5.5%, and 3.5% and 4.5% respectively.
Lee also touched on Singapore’s leadership succession plan, noting that when preparing for the future, one crucial task was leadership renewal.
“As you all know, my original plan was to hand over and step down as prime minister by 2022, before my 70th birthday. But the pandemic disrupted this plan.
“Now, Covid is behind us and my succession plan is back on track,” he said, adding that several controversies which had drawn Singaporeans’ attention recently would not delay his timetable for renewal.