PM Sees Growth At Higher End Of 7-8% Forecast

Source : The Business Times, October 30, 2007

Asia's fundamentals are strong, and S'pore's links with China, India will offset US slowdown

Singapore's economy is likely to grow at 'the higher end' of the government's forecast of 7-8 per cent this year, Prime Minister Lee Hsien Loong said in a labour movement speech yesterday.

Mr Lee: More major policies and initiatives will be necessary from time to time to enable Singapore to stay ahead and remain competitive

Painting an upbeat picture of the economy despite the threat of a recession in the United States, as the sub-prime mortgage crisis leads to an overdue correction in the stock markets, he said Singapore remains in a strong position.

'The economy is doing well,' Mr Lee said at the National Delegates Conference of the National Trades Union Congress. 'I think we can achieve the higher end of the (forecast) range.'

While a recession may hit the US - and the ripple will spread to Singapore - the fundamentals for Asia remain robust, and China and India continue to grow rapidly, he said. 'Our links with them will help us to weather a US slowdown.'

Mr Lee said the government has also moved to provide more office space in the next two or three years and cool the hot property market, which could dampen investment.

'We will continue to monitor trends closely and take further action if necessary,' he said. 'We will make sure that the property market stays in balance over the long term.'

Mr Lee's remarks came barely three weeks after the government published preliminary figures showing that the economy expanded by a blistering 9.4 per cent in the third quarter, trumping analysts' forecasts and beating numbers racked up in the previous three months.

The higher-than-expected growth got economists in the private sector revising their full-year forecasts, with some going as high as 8.7 per cent.

With an average 8.2 per cent already secured for the first three quarters, the official forecast is very much in the bag.

Mr Lee yesterday noted that the hot economy is churning out a record number of jobs, some 114,000 in the first half of the year, while wages rose by a strong 7 per cent.

Citing a report in The Economist magazine, Mr Lee said: 'Singapore is 'booming, bustling and bursting at the seams, a developed country that grows at developing-country rates'.'

Singapore must keep adjusting and adapting to change to stay ahead - and remain competitive. Accordingly, Mr Lee said there will be more major policies and initiatives necessary from time to time.

He said the Ministry of Transport is already working on a land transport review to improve Singapore's public transport system and keep its roads free flowing, adding that 'painful measures' like Electronic Road Pricing and Certificates of Entitlement are necessary.

'Nowadays, it is not just bosses who drive cars, but also many unionists and workers,' Mr Lee said.

The Ministry of Health is also rolling out many initiatives to ensure good and affordable healthcare, he said. Measures include a portable medical benefits system and means-testing in hospitals.

Related Link -
Full text of PM Lee's speech - http://tinyurl.com/yr4hdb