RI stability vital to S'pore economy

RI stability vital to S'pore economy

SINGAPORE (Dow Jones): Singapore's deputy prime minister, Lee Hsien Loong, said Saturday that he sees "strong momentum" in the economy but that events in neighboring Indonesia could influence the outlook for Singapore.

"The momentum is strong," Lee said in answer to a question about the growth forecast for this year. "We will have to see how events in Indonesia develop. If it begins to stabilize, that's good for us. Otherwise confidence could be shaken."

Lee declined to say whether the government would issue a more precise forecast for economic growth this year. The government has given a wide range of between 4.5 percent and 6.5 percent, following an expansion estimated at 5.6 percent in 1999.

He spoke briefly to reporters after the inauguration of a children's newspaper by Singapore Press Holdings Ltd., the island-state's newspaper monopoly.

Indonesia is one of Singapore's largest economic partners, and its economic and political woes affect investor sentiment towards Singapore and the rest of southeast Asia. The country is struggling to rebuild a ravaged banking system and faces separatist movements in far-flung provinces.

On Thursday, Singaporean Prime Minister Goh Chok Tong, during a visit to Indonesian President Abdurrahman Wahid, announced that government-linked Singaporean companies would invest US$500 million to buy small stakes in distressed Indonesian firms. Goh also announced a 400 million Singapore dollar co-financing scheme for private-sector investments in Singapore.