SINGAPORE: Singapore’s economy grew 1.2 per cent this year, hurt by weak US, European and Japanese economies, said Prime Minister Lee Hsien Loong in his New Year message on Monday.
Mr Lee said overall, Singapore has made steady progress this year though economic growth was weaker than the 4.9 per cent expansion last year.
The slowdown was attributed to weakness in Western and Japanese economies as well as difficulty some industries have in hiring the workers they need to grow.
Mr Lee did not give figures for the fourth quarter, but analysts said Singapore’s economy would likely contract in Q4, thereby pushing the economy into a recession, as it had also contracted — by 5.9 per cent on—quarter — in the third quarter.
The government will release advance estimates for fourth quarter economic growth on Wednesday.
But Song Seng Wun, CIMB’s regional economist, said based on the 1.2 per cent growth, Q4 would likely see a contraction of 4 per cent from the last quarter.
Rajiv Biswas, chief economist (Asia—Pacific) at IHS Global Insight, said: "The number that we’re seeing of 1.2 per cent growth in 2012 is reflecting a very weak second half and it looks like the Q4 number will signal a technical recession, which means two quarters of negative growth and this is particularly because of the weakness of the manufacturing exports which have been hit by the EU recession and moderation in growth in China this year."
The overall growth projection for next year is between 1 and 3 per cent.
Prime Minister Lee also warned of pressures companies will face to raise productivity. He said the government will lend them support to do so.
"In our new phase, we must expect slower growth than we have become accustomed to. Slower growth does not mean we will face less pressure. Companies especially must put more effort into raising productivity. The government will lend them support to do so. Only through higher productivity can we sustain real wage increases for Singaporeans," said Mr Lee.
The prime minister also pointed to one long—term initiative that was launched this year —— "Our Singapore Conversation" —— which involves Singaporeans coming together to forge a shared vision for the future.
Mr Lee said it has been a productive airing of views, but added that the process is also about building consensus and learning to walk in one another’s shoes.
He said the next step is to translate the ideals and aspirations into programmes that improve lives.
One issue where consensus needs to be forged is on population.
Prime Minister Lee said it is critical to strike a right balance in Singapore’s population policies.
Fundamentally, Mr Lee said it is about maintaining a strong Singaporean core. But there are also practical concerns to prevent the population from ageing and shrinking, and to keep the economy competitive.
Through the course of the Singapore Conversation, some Singaporeans have expressed the desire for the country to focus less on material aspirations and more on values of inclusiveness and graciousness.
Mr Lee said the country’s population policies cannot just be about numbers.
Ultimately, he said it’s about the Singapore spirit and the ties that bind the nation.
Mr Lee said: "We all need the anchors of family and friends, a sense of familiarity and home even as our society changes rapidly. We need to improve relations — between citizens and new arrivals, young and old, different races and religions — to preserve our social harmony.
"And we need to foster an open, confident spirit in our society, and stay connected to the world. Above all, we must affirm our common Singaporean values, norms and identity, forged through shared experiences and memories, regardless of where we originally came from."
The White Paper on Population will set out all these considerations. It will be published in January and debated in Parliament.
And perhaps in reference to scandals involving high—ranking civil servants, Mr Lee said Singapore needs capable and committed leaders, who uphold high standards of integrity and set good personal examples.
This is so they have the moral authority to lead the nation.
He said the instances of lapses by persons in senior positions are unfortunate and disappointing.
He stressed that while no system can be perfect, Singapore must do its utmost to run a clean and good government —— this means investigating wrongdoings thoroughly, and putting things right decisively and openly.
for PM Lee’s New Year message.
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