January 11, 2010
By Shamim Adam from Bloomberg
Singapore’s first casinos and the opening of new
pharmaceutical factories will support economic growth this year as
overseas demand may remain weak, Trade Minister Lim Hng Kiang said
today.
“External demand will continue to grow but at a sluggish pace,”
Lim said in response to a question in parliament.
“Domestically, the opening of new facilities for the chemicals
and biomedical manufacturing clusters as well as the opening of the
Integrated Resorts will also provide a boost to growth.”
The island, seeking to reduce its dependence on electronics
manufacturing, is allowing casinos to operate in the country for
the first time and has lured investment in pharmaceutical and
bio-technology industries. Genting Singapore Plc unit Resorts World
Sentosa plans to open part of its $4.5 billion project this month,
and Las Vegas Sands Corp. says it may open the Marina Bay Sands in
April.
Singapore’s economy shrank for the first time in three quarters
in the October-to-December period as weaker manufacturing output
interrupted the island’s rebound from its deepest slump since
independence in 1965. The nation will probably avoid sliding back
into a recession amid an “uneven” recovery in 2010, Lim said.
“The risk of a return to recession is low in the absence of
further financial shocks,” Lim said. “But growth momentum in the
second half of 2010 may slow down as the effects of global fiscal
stimulus measures and inventory restocking wane.”
The economy will grow 3 percent to 5 percent in 2010, the
minister said, reiterating a previous forecast.
Labor Market
Singapore’s labor market has “stabilized” as business and hiring
sentiment have picked up in recent months, Lim said.
More companies were planning to increase their headcounts in the
last quarter of 2009 compared with earlier in the year, he
said.
“The unemployment rate, however, is likely to stay up for some
time as it typically lags economic recovery,” Lim said.
The minister reiterated a government forecast that inflation
will average between 2.5 percent and 3.5 percent this year. Low
domestic interest rates reflect global conditions, he said.
The island has maintained a “robust” financial regulatory
framework that is well placed to meet stringent global standards,
helping attract funds to local markets, Lim said. – Bloomberg