Singapore economy grew 3.7% last year


SINGAPORE continued to make progress last year, with the economy growing by 3.7 per cent, although it also hit a few rough spots, Prime Minister Lee Hsien Loong said in his annual New Year message yesterday.

Salaries are up, including for the lower-income, and the 2014 growth forecast is 2 to 4 per cent.

"This means better jobs and new opportunities for workers. It also means that we can do more to make ours a gracious city for all," he said.

The Ministry of Trade and Industry will release more figures on the economy tomorrow.

Mr Lee gave a progress report on the new way forward he mapped out in his National Day Rally last August, one of stronger social safety nets, more measures through education to keep social mobility going, and sharing the fruits of progress more widely through home ownership and support for low-wage workers.

Progress can be seen in shorter queues for new Housing Board flats, stable housing prices and more affordability through targeted subsidies, he said.

In education, the Government is investing in quality pre-school education for all and refining Primary 1 registration and the PSLE scoring system. And reforms are being made to the national health insurance scheme MediShield to offer better lifelong protection against large medical bills.

"These are major shifts in our way forward. We will implement changes progressively, and improve on our programmes as we learn what works best," he said. He also promised more initiatives in the next few years to address other needs.

In May, the Government will set out its agenda for the second half of its five-year term in office when Parliament starts a new session after a mid-term break.

Turning to concerns about foreign workers in the light of the Dec 8 riot in Little India, Mr Lee said Singapore will continue to treat foreign workers fairly, but it also expects them to obey its laws and social norms.

"The riot reminds us that we can never take good order, peace and stability for granted," he said.

On the broader population issue, he said there are no easy choices and stressed that Singapore would take a balanced approach to reduce - but not cut off - the inflow of foreign workers.

The Government is helping firms to adapt by helping them exploit technology and be more productive, and encouraging them to develop their local workforce.

How Singapore fares in the year ahead also depends on its external environment, and Mr Lee highlighted tensions in Asia as a concern. These include disputes in North-east Asia over historical issues and the ownership of islands, the Korean peninsula and overlapping territorial claims by China and South-east Asian countries in the South China Sea.

"Provided nothing untoward happens in Asia, I am confident that Singapore will do well. We are investing in our future and developing new capabilities," he said. It is also enhancing applied education and building new infrastructure such as train lines.

"We are creating exciting opportunities, to hand on to our children a better Singapore than the one we inherited," he said.

He highlighted the courage of national athletes at the SEA Games and Home Team officers in the recent riot, and said the Singapore spirit continues to burn bright. He called on Singaporeans to keep trusting and helping one another, as that will "create a brighter future for ourselves and our children".

Source: Straits Times, 1 Jan 2014

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Economy up 3.7% - at higher end of forecast


THE economy grew 3.7 per cent last year, near the top end of the official forecast of between 3.5 and 4 per cent.

Prime Minister Lee Hsien Loong said in a fairly upbeat 2014 New Year Message yesterday: "Our economy has done well." He said the economic growth number was better than expected, and that median salaries went up by 3.9 per cent in real terms.

Pay for the lower-income also rose. Saying that higher pay means better jobs and new opportunities for workers, he added: "It also means that we can do more to make ours a gracious city for all."

The official growth forecast for this year stays. Mr Lee said the economy is likely to grow by between 2 and 4 per cent - the range which the Ministry of Trade and Industry cited when it raised the 2013 growth forecast of between one and 3 per cent to between 3.5 and 4 per cent.

The 3.7 per cent economic growth has turned out to be largely in line with market expectations. Private-sector economists polled ahead of the New Year Message were pretty bullish and had predicted the growth to be at least close to the top end of the government's forecast.

ANZ's Asia-Pacific chief economist Glenn Maguire said on Monday: "We are expecting the 2013 full year Gross Domestic Product growth to be 4 per cent, towards the upper end of the official target, given the ongoing strength in the services sector."

Stronger growth in the US, China, Japan and Europe should build up greater momentum for Singapore's economy this year, but ANZ has eased its expectations to a more modest 3.2 per cent growth for Singapore in 2014. In reference to the tighter foreign worker policy and global bank borrowings, the bank said: "Though external demand will be improving, it will be difficult for the Singapore economy to grow at the same rate seen in 2013, as the supply side of the economy is squeezed."

Others point out that rising business costs on the home front could also dampen Singapore's growth prospects this year.

Mr Lee sounded more upbeat in his New Year message: "Provided nothing untoward happens in Asia, I am confident that Singapore will do well. We are investing in our future and developing new capabilities for tomorrow's economy, like 3D printing, data analytics and consumer insights research."

Singapore is taking a "balanced approach" in letting in foreign workers, he said; it is reducing - not cutting off - the inflow.

He conceded that companies - small- and medium-sized enterprises especially - are finding it hard to hire the workers they need, but he said the government is helping them to adapt by exploiting technology and becoming more productive.

Mr Lee reiterated that Singapore still needs foreign workers to keep its economy running and to build critical infrastructure.

Still, he cautioned that while the US and European economies are stabilising and Asian prospects staying positive, there are problems and tensions, especially in North-east Asia where the disputes between China, Japan and South Korea over historical issues and ownership of various islands have sharpened - and where the stability of the Korean peninsula is a serious worry.

Source: Business Times, 1 Jan 2014