Singapore’s Economy Grew 1.5% in 2008, Prime Minister Lee Says
By Shamim Adam
Dec. 31 (Bloomberg) -- Singapore’s economy expanded at the slowest pace in seven years in 2008 as exports fell and tourists stayed away amid the worst global slump in sixty years, Prime Minister Lee Hsien Loong said.
Growth was 1.5 percent this year, Lee, 56, said in his New Year message today. That’s less than a fifth of 2007’s expansion of 7.7 percent and slower than the government’s November forecast of 2.5 percent. Job losses in Singapore may increase in the next few months as companies cut costs, the premier said.
“We must prepare for a difficult year ahead, especially the first half of 2009,” Lee said. “Our economy will probably contract further. Compared to the 1997 Asian financial crisis, this crisis is more difficult for us to overcome because it is global.”
Singapore is bringing forward its 2009 budget announcement to January to speed up its response to the global slowdown and will unveil additional steps to help businesses and minimize layoffs, Lee said. The world economy is in a recession, prompting policy makers to cut lending rates, announce spending packages and cut taxes to sustain growth.
Export-dependent Singapore has been battered by declining orders for electronic goods and pharmaceuticals from its biggest customers in the U.S. and Europe, as well as emerging nations. The island’s economy has contracted for two straight quarters and companies such as DBS Group Holdings Ltd. and Parkway Holdings Ltd. have cut jobs and wages.
Fourth-Quarter Estimate
Gross domestic product probably shrank 3.4 percent in the three months ended Dec. 31 from the previous quarter, according to the median estimate of seven economists surveyed by Bloomberg News before Lee released the 2008 growth figure. The trade ministry will release the fourth-quarter data on Jan. 2.
The government has said it will extend more loans to local companies and spend S$600 million ($418 million) over the next two years on worker training programs to prevent job losses.
“We will do more to help viable companies to stay afloat and continue to employ their workers,” Lee said today. “We will introduce measures to help them with their business costs, including rental and wage bills. We are also studying further financing support for companies.”
Singapore lowered corporate taxes by 2 percentage points to 18 percent in 2007 to attract businesses. The Economic Development Board forecasts the nation may get more than S$10 billion in investment commitments in 2009, lower than the “exceptionally high” number of planned projects it attracted the past two years, Lee said today.
“The budget will also contain measures to develop our competitiveness and build up new and long-term capabilities,” he said. “If more measures become necessary, we have the resources and the will to do more to see Singapore through this recession.”
Still, that won’t be enough to bring about a fast recovery in growth for the island, Lee said.
“Quite likely, the global recession will be followed not by a quick rebound, but by several more years of slow growth,” he said. “We cannot expect a quick return to the boom years before the crisis. Things cannot turn around overnight.”
To contact the reporter on this story: Shamim Adam in Singapore at [email protected]
Last Updated: December 31, 2008 05:01 EST
By Shamim Adam
Dec. 31 (Bloomberg) -- Singapore’s economy expanded at the slowest pace in seven years in 2008 as exports fell and tourists stayed away amid the worst global slump in sixty years, Prime Minister Lee Hsien Loong said.
Growth was 1.5 percent this year, Lee, 56, said in his New Year message today. That’s less than a fifth of 2007’s expansion of 7.7 percent and slower than the government’s November forecast of 2.5 percent. Job losses in Singapore may increase in the next few months as companies cut costs, the premier said.
“We must prepare for a difficult year ahead, especially the first half of 2009,” Lee said. “Our economy will probably contract further. Compared to the 1997 Asian financial crisis, this crisis is more difficult for us to overcome because it is global.”
Singapore is bringing forward its 2009 budget announcement to January to speed up its response to the global slowdown and will unveil additional steps to help businesses and minimize layoffs, Lee said. The world economy is in a recession, prompting policy makers to cut lending rates, announce spending packages and cut taxes to sustain growth.
Export-dependent Singapore has been battered by declining orders for electronic goods and pharmaceuticals from its biggest customers in the U.S. and Europe, as well as emerging nations. The island’s economy has contracted for two straight quarters and companies such as DBS Group Holdings Ltd. and Parkway Holdings Ltd. have cut jobs and wages.
Fourth-Quarter Estimate
Gross domestic product probably shrank 3.4 percent in the three months ended Dec. 31 from the previous quarter, according to the median estimate of seven economists surveyed by Bloomberg News before Lee released the 2008 growth figure. The trade ministry will release the fourth-quarter data on Jan. 2.
The government has said it will extend more loans to local companies and spend S$600 million ($418 million) over the next two years on worker training programs to prevent job losses.
“We will do more to help viable companies to stay afloat and continue to employ their workers,” Lee said today. “We will introduce measures to help them with their business costs, including rental and wage bills. We are also studying further financing support for companies.”
Singapore lowered corporate taxes by 2 percentage points to 18 percent in 2007 to attract businesses. The Economic Development Board forecasts the nation may get more than S$10 billion in investment commitments in 2009, lower than the “exceptionally high” number of planned projects it attracted the past two years, Lee said today.
“The budget will also contain measures to develop our competitiveness and build up new and long-term capabilities,” he said. “If more measures become necessary, we have the resources and the will to do more to see Singapore through this recession.”
Still, that won’t be enough to bring about a fast recovery in growth for the island, Lee said.
“Quite likely, the global recession will be followed not by a quick rebound, but by several more years of slow growth,” he said. “We cannot expect a quick return to the boom years before the crisis. Things cannot turn around overnight.”
To contact the reporter on this story: Shamim Adam in Singapore at [email protected]
Last Updated: December 31, 2008 05:01 EST
