Open 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.”
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
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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