WITH home prices at their highest in a decade, office rentals at record levels and companies hiring at breakneck speed, the talk is that the Singapore economy is overheating.
Yesterday, Prime Minister Lee Hsien Loong disagreed. "I don't think the economy as a whole is overheating," he told Singapore and international media in Budapest.
"This year, we expect 7-to-8-per-cent growth. It's a good figure, but at the same time, inflation is well under control," he said on the second day of his first official visit to Hungary.
As interim office space is made available, he expects office rentals to level out.
"In the short term, there is a problem because so many businesses want to set up in Singapore," he said. "In the medium term, we will have enough supply of office space."
His comments came just hours before the Ministry of Trade and Industry was to release flash estimates for growth in the third quarter. Economists expect a robust expansion of 9 to 9.6 per cent from a year ago.
The Monetary Authority of Singapore will also issue its biannual monetary policy statement today and it is expected to let the Singapore dollar continue its modest and gradual appreciation, which will cool inflation.
With inflation at a 12-year high, economists from Morgan Stanley and HSBC Holdings had last week questioned if signs of overheating were beginning to show.
At yesterday's press conference in the Hungarian capital, meant as a platform to discuss two new agreements between Singapore and Hungary, the foreign media pressed Mr Lee not only on economic issues but also the situation in Myanmar.
Describing the situation in Myanmar as "serious", Mr Lee said: "What is necessary is to find reconciliation and an agreement among the parties in Myanmar on the way forward.
"There's no easy way forward. It's not simply a matter of regime change. If you look at Iraq, you know that regime change is a slogan but may not be a policy."
He also rebutted accusations that Singapore — which currently holds the Association of South-east Nations (Asean) chair — was a money-laundering centre for members of Myanmar's military regime.
Earlier in the day, Mr Lee had an hour-long, closed-door meeting with his Hungarian counterpart Ferenc Gyurcsany, who last visited Singapore in 2005.
Pointing to the potential for partnerships in areas such as research and education to flourish, Mr Lee said: "Hungary is a gateway to Central and Eastern Europe, and Singapore is a gateway to the whole of Asia. Through Singapore, you can work with other Asean countries ... Vietnam, Malaysia, Indonesia ... China, India, and link up with the transformation of Asia that is going to change the world."
The two countries signed two agreements — one to promote economic cooperation and another which involves Singapore's Agency for Science, Technology and Research, or A*Star, to promote cooperation in science, engineering and biomedical research.
Also in Budapest with Mr Lee is a 30-member business delegation from Singapore, which he said was "very eager" to explore opportunities in the central European nation, which is currently Singapore's largest trading partner in Central Europe, with trade volume worth $1.36 billion last year.
"I hope that Hungarian firms, too, will similarly take interest in Singapore," he said.
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