PM Lee confident about Singapore’s economy

Singapore’s Prime Minister Lee Hsien Loong said Singapore and Asia can weather the storm, should the US go into a recession.

He made the comment at a breakfast meeting with 40 businessmen from the French Business Confederation as he wrapped up his three-day official visit to Paris.

The financial markets in the West have been hit by the US sub-prime problems, and that in turn has affected Asia, including Singapore.

Although a few Asian banks have some exposure to bad loans in the US, Mr Lee said most had only limited direct exposure.

“This is positive for Asia because if the Asian banks have also been deeply engaged, then we would have the problem, not only imported to us, but on our door-step. But fortunately, it does not appear to have happened,” he said.

Giving his assessment, Mr Lee said the economies of China and India will continue to grow despite what happens in the US, and will help give a boost to the Asian region.

For Singapore, an open economy, Mr Lee said it will feel the impact of what’s happening in the US, but there are several positive trends to help the country ride through the storm, such as having new investments and major construction projects that are currently underway.

On how Singapore’s growth would be affected, he noted the country’s economy grew 7.5 per cent last year, and Singapore is maintaining its official forecast of 4.5 to 6.5 per cent growth for now.

Mr Lee said, “We’ll watch the situation closely and will update the forecast if necessary. We should not have a knee jerk reaction and lose our bearings in the middle of dramatic market volatility. We’ve had four years of strong and above-strength growth in Singapore.”

He also said Singapore and Asian countries can weather this financial storm, unlike the 1997 Asian financial crisis. “We got through that. That was all around us, right in Asia, we were at ground zero. And this is something which is broader. But in Asia, I think we are stronger and better prepared and we will weather it.”

Mr Lee reassured French businessmen that despite current financial volatility, Asia is a growing market with ample opportunities. – CNA/ac

Source : Channel NewsAsia – 23 Jan 2008

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