S'pore economy to grow by 4.5-6.5% in 2008: PM Lee

PRIME Minister Lee Hsien Loong has conveyed a 'cautiously optimistic' outlook for 2008.

In his annual New Year's Day message, Mr Lee said Singapore enjoyed robust expansion this year, growing by 7.5 per cent for the whole of 2007.

Looking ahead, he said the economy is expected to grow by 4.5 to 6.5 per cent in 2008.

Mr Lee said the US may go into recession because of the financial market problems.

He added a US downturn will affect Asia too, but 'the impact on Singapore will be offset somewhat by the strong momentum in the dynamic Asian economies'.

In Singapore, the country will see the realisation of several major projects in 2008.

These include the Singapore Fyler, the inaugural F1 Singapore Grand Prix, the Marina Barrage and the two Integrated resorts, which wil be completed by 2010.

Internationally, Mr Lee said Singapore will continue to expand its economic space as a more diversified economy will enable the country to to weather external shocks better.

2007 another good yearRe-capping 2007, the prime minister noted that high growth has benefitted all Singaporeans.

A record 172,000 jobs were created in the first three quarters of the year.

Unemployment was down 1.7 per cent - the lowest in almost a decade.

The Economic Development Board drew in a record $16 billion of fixed assest investment in manufacturing and projects generating $3 billion of total business spending in services.

Problems of successThe past four years of sustained growth however, has also created some 'problems of success', noted Mr Lee.

There's the shortage of prime office space, the construction industry facing resource constraints and the tight labour market.

Inflation has also picked up.

But Mr Lee said, 'while prices have gone up, so have earnings and generally more than inflation.'
'That is why shopping malls were thronged with Christmas shoppers, and tourist agencies have had a record year arranging overseas holidays for Singaporeans. So although nobody likes to see prices go up, most working Singaporeans should be able to cope, and in reality are better off despite the inflation', he added.

Mr Lee however acknowledged that retired Singaporeans living off their savings would be the worst affected by rising costs.

He said finances permitting, the Government 'should have something more in the FY2008 Budget to help needy and older Singaporeans'.

'But every citizen should also do his own part to upgrade himself. Low-income workers should make full use of reskilling and retraining programmes offered by WDA and NTUC', he added.
New challengesMr Lee also outlined several significant policy decisions the Government has to tackle in 2008.

These include healthcare, where the Health Ministry will discuss and finalise the means-testing scheme with patients, unionists and the public over the next few months.

Transports is another key issue.

Mr Lee said the focus is to improve public transport so that more Singaporeans will take buses and trains instead of driving cars.

He added: 'We have to lower the vehicle growth rate and step up measures to manage the demand for road space. We need to enhance the ERP and extend its coverage so that driving costs significantly more, but we will balance that with lower vehicle ownership taxes'.

Another issue - education. Mr Lee reiterated the Government's aim to raise public-funded university places to take in 30 per cent of every co-hort by 2015.

This'll be done through the set up of a fourth publicly-funded university.

'We will be tackling these three issues in 2008. But we must see the challenges ahead in perspective. Singapore is in a strong position. If a US slowdown affects Asia, I am confident that we will weather it well, and our people and companies will continue to find opportunities amidst the challenges.

'I wish all Singaporeans a happy and fulfilling 2008,' Mr Lee said.