Singaporeans should brace themselves for the impact of a
sluggish global economy in the coming months, said Deputy Prime
Minister Tharman Shanmugaratnam yesterday.
But the fundamentals of the local economy are still good and a
major global crisis like the one in 2008 is unlikely to happen, he
added. Mr Tharman, who is also Finance and Manpower Minister, was
commenting on flash estimates for Singapore's economic growth in
the second quarter released on Friday.
Gross domestic product (GDP) grew an estimated 0.5 per cent
compared with the same period last year - down sharply from the 9.3
per cent year-on-year growth seen in the first quarter.
The slowdown was traced to manufacturing, which has seen falling
pharmaceuticals production and reduced demand for semiconductor
chips. The sector was also affected by the earthquake and tsunami
disaster in Japan in March.
Some of the factors are temporary and may reverse themselves,
said Mr Tharman, pointing instead to structural trends in the
global economy that pose a greater worry.
'Things are not looking better in Europe,' he said, referring to
the fact that several members of the European Union are on the
brink of debt default. 'They are looking worse now than they were
six months ago, and much worse than 12 months ago. They are still
kicking the can down the road and unless the problems are being
resolved decisively, confidence is going to keep ebbing,' he
added.
-- ST
