The Minister for Trade and Industry (Trade), Mr Lim Hng Kiang, told the Parliament that the Singapore government does not expect outright recession, overall, it expects Singapore economy to still grow at between 1 to 2 percent, though on the lower end of the projection.
Mr Seah Kian Peng (Marine Parade GRC) had asked the Minister in Parliament, “Given the weak economic indicators for the past several months including rising unemployment, slower growth projections, and a weak global economic outlook, whether a recession is imminent and, if so, what are some of the measures that the Government is contemplating.”
Mr Lim Hng Kiang said the global economic outlook is expected to remain weak. This is due to the slower growth in China, weak oil prices, lack of investment demands and weaker global trade flows. Due to this background, growth in the Singapore economy has slowed, from 4.7 percent in 2013, to 3.3 percent in 2014 and 2 percent in 2015. While growth came in at 2.1 percent in the first half of 2016, it is likely to weaken in the second half of this year.
As the global economic situation remains fluid, the government will continue to monitor the situation closely and stands ready to respond in the event of a downturn. Depending on the nature and severity of the downturn, it is prepared to consider introducing a range of contingency measures.
The contingency measures could include broad-based, as well as sector-specific measures. Companies adversely affected by the slowdown can tap on assistance measures that are already put in place.
Mr Lim pointed that Small Medium Entreprises (SMEs) can tap into the SME Working Capital Loans that helps small companies with cash-flow concerns and financing needs for growth. He also stated that the marine sector’s foreign worker levy increases has been deferred for a year, amid challenging conditions faced by the sector.
Mr Seah then followed up with another question, “Given the sombre outlook, and from my chat with my friends in various businesses, I think the outlook is one of great uncertainty. There seems to be very few spots of positive news. And from the consumers’ side, looking at the various reports, consumer confidence is at an all-time low. So, when I put these two together, for many of us, we feel that a recession is imminent.”
“My question to the Minister is: do we wait for that to come, or do we try to put some measures in place to forestall these dark clouds that I see coming?” he asked.
To this, the Minister answered, “As I mentioned just now, our baseline projection is not an outright recession, but we cannot rule out the possibility that the economy will experience some quarters of negative growth on a quarter-on-quarter basis. But, overall, we expect our economy to still grow at between 1 percent and 2 percent, albeit on the lower end of the projection.”
