MTI Sees Growth At Upper End Of 4%-6% Range (ST)

Source : The Straits Times, 22 Aug 2007

The economy should be able to expand annually at the ‘upper end’ of the Government’s 4 per cent to 6 per cent estimate over the next five years - if external conditions stay favourable.

That is the view of the Ministry of Trade and Industry (MTI) and follows comments in Prime Minister Lee Hsien Loong’s National Day Rally speech on Sunday.

He said Singapore’s economy had the potential to grow by an average of between 4 per cent and 6 per cent annually for the next five to 10 years.

While the Economic Review Committee had estimated previously that the medium-term growth potential was between 3 per cent and 5 per cent, reforms in the past five years have resulted in growth averaging 6.1 per cent a year, said MTI.

The new estimate is based on higher labour force growth of between 1.5 per cent and 2.5 per cent and higher productivity of between 2.5 per cent and 3.5 per cent.

‘The economy’s diversification into higher value-added industries and influx of new capital investments will increase productivity growth,’ said MTI.

The estimate also takes into account the rise of China and India - which will join the United States, the European Union and Japan as external drivers of demand - as well as the recovery of South-east Asian countries from the Asian financial crisis.