Tuesday, December 31, 2013

Singapore Growth Quickened in 2013 as Lee Pursues Economic Shift



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Photographer: Kiyoshi Ota/Bloomberg


Prime Minister Lee Hsien Loong said, “The European and American economies are… Read More



Prime Minister Lee Hsien Loong said, “The European and American economies are stabilizing. Asian prospects are still positive, but there are problems and tensions.” Close


 SingTel to boost mobile network capacity at New Year countdown


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Photographer: Kiyoshi Ota/Bloomberg


Prime Minister Lee Hsien Loong said, “The European and American economies are stabilizing. Asian prospects are still positive, but there are problems and tensions.”


Singapore’s growth quickened in 2013

and the country is making progress in economic restructuring

while strengthening social safety nets, Prime Minister Lee Hsien Loong said.


Gross domestic product rose 3.7 percent last year, Lee, 61,

said in his New Year message released yesterday. That’s in line

with the government forecast of 3.5 percent to 4 percent growth

and compares with the median in a Bloomberg News survey of

economists for a 3.55 percent expansion. The economy grew 1.3

percent in 2012.


“The European and American economies are stabilizing,”

Lee said. “Asian prospects are still positive, but there are

problems and tensions,” he said, citing regional geopolitical

disputes.


Singapore’s economic acceleration last year had been aided

by recoveries in the U.S. and Europe, while companies in the

city-state adjusted to rising business costs and curbs on cheap

foreign labor. The island’s trade promotion agency said in

November exports will rebound this year after contracting in

2013, easing pressure on the central bank to allow the currency

to weaken to support overseas shipments.


Lee reiterated a forecast for the economy to grow 2 percent

to 4 percent in 2014. U.S. consumer confidence is at a four-month high and euro-area factory output grew at a faster pace

than economists forecast in December.


“This is consistent and fits into a story of a gradual

recovery,” said Vishnu Varathan, a Singapore-based economist at

Mizuho Bank Ltd. The central bank “needs to maintain the

current policy with much lesser scope for easing, especially if

the global recovery continues,” he said.


Safety Nets


The 2013 growth rate given by Lee implies Singapore’s

economy grew between 4.1 percent and 4.5 percent in the fourth

quarter from a year earlier, Varathan said. The median estimate

in a Bloomberg survey is 4.8 percent.


Singapore’s trade ministry will release preliminary fourth-quarter GDP (SGDPQOQ) figures at 8 a.m. local time tomorrow. The economy

probably shrank an annualized 1.3 percent from the previous

three-month period, according to the median of 11 economists

surveyed by Bloomberg.


The Singapore dollar dropped more than 3 percent against

its U.S. counterpart last year, the biggest annual decline since

2001. The benchmark Straits Times Index of stocks was little

changed in 2013, making it the worst-performer among developed

markets.


Lee said the government is “working steadily” toward new

directions for the country, including strengthening social

safety nets and sharing “fruits of progress more widely”

through support for low-wage earners and homeownership programs.


Labor Crunch


The island’s population has jumped by more than 1.1 million

since mid-2004 to around 5.4 million, leading to voter

discontent over congestion and competition for housing. The

government has tightened restrictions on foreign workers for

four straight years, a move that has led to a labor crunch and

hurt businesses.


A riot last month involving about 400 people in an area

popular with South Asian foreign workers was “inexcusable,”

Lee said yesterday. The incident occurred after a fatal traffic

accident and was the nation’s first riot in more than four

decades, reigniting the debate about Singapore’s dependence on

overseas laborers.


“Whether we bring in more immigrants and foreign workers

or fewer, whether we aim for higher growth or lower, there are

no easy choices for Singapore,” Lee said. “We are taking a

balanced approach, reducing but not cutting off the inflow of

foreign workers.”


To contact the reporter on this story:

Sharon Chen in Singapore at

schen462@bloomberg.net


To contact the editor responsible for this story:

Stephanie Phang at

sphang@bloomberg.net



Singapore Growth Quickened in 2013 as Lee Pursues Economic Shift

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