Growth may slow, but outlook still healthy

Growth may slow, but outlook still healthy

 

By Alvin Foo

 

DESPITE tough global conditions, the economic outlook for Singapore is for ‘slower but still healthy growth’ this year, said Trade and Industry Minister Lim Hng Kiang yesterday.

 

Mr Lim told Parliament that Singapore is in a strong position to cope, thanks to its restructuring and reform efforts since 2001 as well as its healthy investment pipeline and strong market positions in strategic clusters.

 

‘The MTI‘s (Ministry of Trade and Industry) forecast for the Singapore economy for 2008 is 4 to 6 per cent – 6 per cent if the US slowdown is short and shallow, and 4 per cent if the US goes into a deeper and longer recession,’ said the minister.

 

Last month, US recession fears led the Government to trim its growth forecast from an earlier estimate of 4.5 to 6.5 per cent to between 4 and 6 per cent.

 

The economy grew 7.7per cent last year.

 

Mr Lim said the Government’s approach is to grow the economy strategically, not tactically.

 

This involves developing strategic clusters that Singapore is competitive in and tapping opportunities that arise, within and across these clusters.

 

‘Through this approach, we are also better able to address the resource needs and cost pressures within each cluster,’ he added.

 

Last Monday, Mr Inderjit Singh (Ang Mo Kio GRC) told Parliament that the Government’s strategy of growing the economy as fast as possible in good years was partly to blame for rapidly rising costs.

 

Mr Singh termed it the ‘grow-at-all-costs’ policy, which he suggested had led to an overheated economy.

 

Mr Lim said yesterday: ‘Our strong position today did not come about by accident… I think MrInderjit Singh exaggerates for impact.

 

‘I am sure he is not advocating that we plan to just grow at a comfortable rate and forgo opportunities if they do not fit our plan.’

 

The minister said that the Government is building ‘a top-quality economy’, one that is ‘well-diversified across sectors and across markets, with a strong external wing that allows us to seize new opportunities overseas, and… powered by R&D, enterprise and entrepreneurship’.

 

He highlighted key strategic clusters, including chemicals, electronics, transport engineering, precision engineering and biomedical sciences.

 

On chemicals, he said that Singapore needs to anchor a critical mass of refining and cracking capabilities to stay a top petrochemical hub.

 

Mr Lim said the aerospace industry is one of the fastest-growing sectors here, surging 10 per cent to hit a record $6.9billion in output last year.

 

In the biomedical sciences cluster, he noted that Singapore is facing stiff competition from places such as Boston in the United States, Ireland and Puerto Rico, so it needs to keep investing in infrastructure and to train talent.

 

Besides developing clusters, the Government’s strategy also involves growing Singapore‘s economic space.

 

This can be done via deepening its presence in current markets, seeking new ones and helping local firms internationalise.

 

Mr Lim said: ‘We should not stop growing or take a grow-slow approach when the going gets tough…

 

‘Besides remaining competitive, we should also look to set the pace, break new ground, and set fresh benchmarks.’

 

For more from Parliament, click for our free video news.

 

Source: Straits Times

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