01-01-2013, 08:32 AM
The Straits Times
www.straitstimes.com
Published on Jan 01, 2013
Economy grew a slower 1.2%
PM Lee sounds warning for 2013 and outlines way forward for Singapore
By robin chan political correspondent
SINGAPORE grew at a slower-than-expected 1.2 per cent last year, a rate economists say implies the economy has slipped into a technical recession after two years of sound growth.
They said the slower expansion, announced yesterday by Prime Minister Lee Hsien Loong in his New Year message, indicates the economy probably contracted in the fourth quarter, like it did in the third quarter.
A technical recession occurs when growth is negative for two quarters in a row.
Said Barclays Capital economist Leong Wai Ho: "The economy has lost momentum and although it has stabilised, it has remained at a depressed level.
"We enter the new year facing the challenge of stagnant growth and continued high price pressures."
PM Lee attributes the slower growth last year to the weak economies of the US, Europe and Japan, and the difficulty some Singapore employers face in "hiring the workers they need to grow".
In fact, the rate is below the Government's forecast of around 1.5 per cent and is the lowest since the 2009 recession following the global financial crisis.
But unlike previously, there will be no sharp rebound like in 2010 when the economy grew 14.8 per cent.
PM Lee said as much, noting that Singapore is expected to grow between 1 per cent and 3 per cent this year.
"In our new phase, we must expect slower growth than we have become accustomed to."
The reason is the economy is being restructured to rely less on foreigners and more on productivity growth in the next 10 years.
But, Mr Lee added: "Slower growth does not mean we will face less pressure. Companies especially must put more effort into raising productivity."
The Ministry of Trade and Industry will release more figures on the economy tomorrow.
Looking ahead, Mr Lee said the next step in the ongoing national conversation on Singapore's future is to translate the ideals and aspirations of Singaporeans into programmes, and build a consensus on the way forward.
He also outlined two key issues facing Singapore: population and embracing the right values.
The White Paper on the population challenges will be out this month and debated in Parliament.
He said the consensus reached has to strike a balance between preventing the population from ageing and shrinking, and keeping the nation's social harmony with a Singaporean core.
On the need for right values, he noted the several instances of "lapses by persons in senior positions", probably referring to the sex scandals involving two top civil servants and Speaker of Parliament Michael Palmer.
Mr Lee vows to run a clean and good government, by investigating wrongdoings thoroughly and dealing with them decisively and openly.
He also spoke of the need to invest in Singapore's social and cultural capital, saying "our success as a nation is defined not just in economic terms but also by our ideals and values".
He added: "We can transform Singapore into something even more special if we strike the right balance between head and heart in all these ways."
Looking at the past year, he noted the country's steady progress, addressing the hot-button issues of housing and transport. The Government has also strengthened the social safety net, with measures like the permanent GST Voucher.
The Prime Minister wishes all Singaporeans a very happy New Year.
chanckr@sph.com.sg
Additional reporting by Goh Chin Lian
www.straitstimes.com
Published on Jan 01, 2013
Economy grew a slower 1.2%
PM Lee sounds warning for 2013 and outlines way forward for Singapore
By robin chan political correspondent
SINGAPORE grew at a slower-than-expected 1.2 per cent last year, a rate economists say implies the economy has slipped into a technical recession after two years of sound growth.
They said the slower expansion, announced yesterday by Prime Minister Lee Hsien Loong in his New Year message, indicates the economy probably contracted in the fourth quarter, like it did in the third quarter.
A technical recession occurs when growth is negative for two quarters in a row.
Said Barclays Capital economist Leong Wai Ho: "The economy has lost momentum and although it has stabilised, it has remained at a depressed level.
"We enter the new year facing the challenge of stagnant growth and continued high price pressures."
PM Lee attributes the slower growth last year to the weak economies of the US, Europe and Japan, and the difficulty some Singapore employers face in "hiring the workers they need to grow".
In fact, the rate is below the Government's forecast of around 1.5 per cent and is the lowest since the 2009 recession following the global financial crisis.
But unlike previously, there will be no sharp rebound like in 2010 when the economy grew 14.8 per cent.
PM Lee said as much, noting that Singapore is expected to grow between 1 per cent and 3 per cent this year.
"In our new phase, we must expect slower growth than we have become accustomed to."
The reason is the economy is being restructured to rely less on foreigners and more on productivity growth in the next 10 years.
But, Mr Lee added: "Slower growth does not mean we will face less pressure. Companies especially must put more effort into raising productivity."
The Ministry of Trade and Industry will release more figures on the economy tomorrow.
Looking ahead, Mr Lee said the next step in the ongoing national conversation on Singapore's future is to translate the ideals and aspirations of Singaporeans into programmes, and build a consensus on the way forward.
He also outlined two key issues facing Singapore: population and embracing the right values.
The White Paper on the population challenges will be out this month and debated in Parliament.
He said the consensus reached has to strike a balance between preventing the population from ageing and shrinking, and keeping the nation's social harmony with a Singaporean core.
On the need for right values, he noted the several instances of "lapses by persons in senior positions", probably referring to the sex scandals involving two top civil servants and Speaker of Parliament Michael Palmer.
Mr Lee vows to run a clean and good government, by investigating wrongdoings thoroughly and dealing with them decisively and openly.
He also spoke of the need to invest in Singapore's social and cultural capital, saying "our success as a nation is defined not just in economic terms but also by our ideals and values".
He added: "We can transform Singapore into something even more special if we strike the right balance between head and heart in all these ways."
Looking at the past year, he noted the country's steady progress, addressing the hot-button issues of housing and transport. The Government has also strengthened the social safety net, with measures like the permanent GST Voucher.
The Prime Minister wishes all Singaporeans a very happy New Year.
chanckr@sph.com.sg
Additional reporting by Goh Chin Lian