Oct 15, 2012

Singapore - S'pore economy not heading for recession - Lim Hng Kiang

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SINGAPORE: Singapore economy is not heading for a recession and is on track for modest economic growth next year. This is according to Minister for Trade and Industry, Lim Hng Kiang.

Speaking in Parliament on Monday, the minister said the lacklustre economic growth this year is largely due to the challenging global economic conditions.

Mr Lim said: "On the economic growth side, even though the external environment presents very strong headwinds to Singapore, we expect that we will end the year still within the range that we forecasted, between 1.5 and 2.5 per cent.

"And that next year, our growth rate will be below our potential, but we will still continue to enjoy modest growth, so we can achieve 1.5 to 2.5 per cent this year, and similar rates next year. So we are not heading to a recession, technical recession notwithstanding."

Mr Lim also highlighted Singapore's inflationary risks, and supported the Monetary Authority of Singapore's decision to use the stronger Singapore dollar to mitigate the impact of inflation.

He added that Singapore should not use the exchange rate to cushion the economy and boost the competitiveness of its exports.

Last week, the MAS unexpectedly kept its Singapore dollar policy unchanged - that is, keeping a modest and gradual appreciation of the Singapore dollar on a trade-weighted basis.


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