Singapore Cuts Growth Forecast for 2008 to 4%-5%

Country is preparing for bumpy year

Singapore on August 8 cut its economic growth forecast this year to 4%-5% from 4%-6% as Prime Minister Lee Hsien Loong warned Singaporeans to brace themselves for a "bumpy year ahead."

Speaking on the eve of the country's National Day, Lee said the economy grew 4.5% in the first half from a year ago. "We celebrate National Day this year in a somewhat guarded mood. The last 12 months have been a period of economic uncertainty worldwide," he said, noting that the U.S. economy is still facing serious problems.

"The housing crisis is adding further stress to its financial system. U.S. consumers are spending less, and that is affecting the whole global economy. The difficulties will probably drag on well into next year before getting better."

Singapore's economy, which had initially been partly buffered by strong Asian economic growth, is also feeling the impact of America's problems as regional economies are affected, he said.

"We must therefore prepare ourselves for a bumpy year ahead," the prime minister said.

Copyright Agence France-Presse, 2008

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