According to Banco de España estimates,10 a hypothetical interruption of energy imports from Russia would have an impact of between 2.5% and 4.2% on EU GDP in the first year, depending on the assumption considered regarding the European economies’ ability to replace Russian energy sources. The impact would range between 1.9% and 3.4% for Germany, 1.2% and 2% for France and 2.3% and 3.9% for Italy. Such a scenario would also foreseeably lead to a greater surge in inflation in the short term. The impact on the Spanish economy would be substantially lower, given that Spain is less energy dependent on Russia and has greater supplier diversification. Based on these simulations, it would range from 0.8% to 1.4% of GDP. Practically one-half of these effects would be attributable to the impact on the other European countries. At any rate, these values should be regarded as short-term impacts which would gradually decrease as the ability to replace Russian energy imports increases. The outlook for the global economy has also worsened significantly The combination of high inflation, tightening of financing conditions associated with the monetary policy response in many countries and the persistence of bottlenecks, among other aspects, is adversely affecting the global economy, resulting in macroeconomic projections being revised down across the board. Thus, in the United States, real GDP declined in the first two quarters and in China activity plummeted in Q2 as a result of the measures adopted by the authorities under the zeroCOVID strategy. This fall was particularly steep in the residential sector.

Asia will grow, and the demand for quality in finance will grow. As global financial institutions restructure, and as technology transforms jobs in the next decade and beyond, we must ensure we are well prepared with the skills, depth of expertise and innovative capabilities to stay relevant and competitive. We have to continue to build globally competitive teams in Singapore, by proactively developing our Singaporean core while remaining open to foreign professionals with needed specialised experience and skill-sets. Skills that make the financial sector of tomorrow In short, we can excel in finance and build rewarding careers for Singaporeans. We move ahead from a solid base: a well-reputed financial centre with extensive links to the world, and a competent and skilled workforce. As we look to the future, we must develop capabilities in five areas, which I will touch on briefly in turn: (I)  Deep Functional Expertise;  (II)  Cross-Functional Capability;  (III)  Regional Knowledge and Experience;  (IV)  Technological Skills and Adaptability; and  (V)  Leadership  (I)  Deep functional expertise  First, we need to deepen functional expertise, across all areas of finance – in banking, capital markets and insurance. We are seeing a greater demand for specialised skills, for example in structured trade finance, reinsurance and specialty insurance. Financial institutions need strong expertise in risk management and compliance. In wealth management, there is demand for more sophisticated investment strategies that better hedge risks, and for being able to execute these strategies efficiently.