Singapore cuts 2008 GDP growth forecast to 4%-5%

Singapore Prime Minister Lee Hsien Loong, in his National Day message, has cut the 2008 GDP growth forecast to between 4 per cent and 5 per cent from an earlier estimate of between 4 per cent and 6 per cent.

He also said the country faces a tough year ahead as it is beginning to feel the impact of a US slowdown.

“For the whole year, we expect growth to be between 4 and 5 per cent,” Mr Lee said in his annual message, which was televised on the eve of Singapore’s 43rd birthday.

Mr Lee said the Singapore economy had expanded by 4.5 per cent in the first six months of 2008.

“Singapore’s economy has so far been partly buffered, because we’ve been carried along by the vibrancy of the Asian region. But Asian economies are starting to feel the impact of America’s problems, and so are we. We must therefore prepare ourselves for a bumpy year ahead,” he said.

Mr Lee acknowledged the problems Singaporeans are facing are due to global inflation. And while the government cannot prevent prices from going up as they are worldwide, it is trying to lighten the burden on Singaporeans through schemes like Workfare and ComCare.

“We are doing the next best thing: to put in place effective relief measures, and provide the poor and the needy with the help they need. We must look beyond immediate problems like the cost of living, to understand what is happening in the world around us, discover new opportunities and tackle our longer-term challenges,” he said.

The annual message is seen as a prelude to the National Day Rally, where the Prime Minister goes into further detail on the long-term challenges facing the country.

In the televised message on Friday, Mr Lee highlighted three other points.

First, the upgrading of Singapore’s economy: to do so, there must be investment in its people. One way is through education. To that end, Singapore is building a fourth university which will take its first batch of students in 2011, well ahead of the original target of 2015. The publicly-funded university will have its campus in Changi.

The second point Mr Lee highlighted was how to encourage Singaporeans to have more children to boost the country’s total fertility rate, which currently stands at only 1.29

PM Lee said: “We can create an environment where Singaporeans see them (children) as a natural and important part of life, and where young couples get support in starting families. We have looked at this comprehensively and will take further steps to address the practical problems which couples face.”

Mr Lee also spoke of adapting Singapore to be able to educate and engage what he called “cyber-citizens”.

He said: “We must adapt ourselves to it, and use it to educate and engage our cyber-citizens. We will evolve our policies and rules, our economy and society, to take full advantage. We will continue to open up our system progressively.”

Mr Lee hinted that the country will continue to open up space for political and societal debate, saying it is the “right way to go”. But he also said that as the country continues to open up, its new generation of citizens need to understand that all freedoms come with responsibilities.

Source : Channel NewsAsia – 8 Aug 2008

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