Singapore Economy To Grow Only Slightly

By Agence France-Presse Singapore's economy should grow only between 0% and 1% this year, Prime Minister Goh Chok Tong said Aug. 8, further lowering the government's original estimate of between 0.5% and 2.5%. In a somber speech on the eve of the city-state's 38th independence day celebrations, Goh cited the devastating effects on the economy from SARS (Severe Acute Respiratory Syndrome) and tougher competition from within the region. "Next year, we expect the external conditions to improve some more, and Singapore should see much better growth," Goh said. Additionally, gross domestic product shrank 4.2% in the second quarter with the unemployment rate remaining high. The three months to June shrinkage meant the economy contracted by 1.3% in the first half. For the second half of the year, growth is expected at between 1.3% and 3.3%. "We have suffered successive blows in the last six years. First the Asian financial crisis, then the recession in 2001 and the Jemaah Islamiyah terror plot, and this year, SARS," the prime minister said. Despite the global economic slowdown, the Economic Development Board should be able to attract 7.5 billion Singapore dollars (US$4.26 billion) worth of investments in the crucial manufacturing sector this year, just a little short of its target of eight billion dollars. Singapore's performance in containing SARS boosted investor confidence in the country, he said, but businesses also have asked the government to trim down costs. "The reason is simple: We are up against competition from lower-cost countries," Goh said, pointing out that for the first time in its history port operator PSA Corp. had to lay off staff to trim costs and prevent clients from shifting to neighboring Malaysia. Copyright Agence France-Presse, 2003