Singapore sees worsening outlook after U.S. attacks
Singapore sees worsening outlook after U.S. attacks
SINGAPORE (AP): Cabinet ministers said Tuesday that the government is working on a second economic rescue package for the recession-hit city-state amid a worsening economic outlook after the terror attacks in the United States.
The Minister for Trade and Industry, George Yeo, told Parliament that the government expects the economy to contract in 2001 and Singaporeans must "be prepared for a more prolonged downturn."
Finance Minister Richard Hu said off-budget measures to help the economy will likely be announced in mid-October after the release of gross domestic product data on Oct. 7.
The government announced a package of off-budget measures in July when Singapore slipped into a recession to help the city- state ride out its economic woes.
Singapore has been hit hard by the U.S. economic slowdown. Slack U.S. demand for Singapore's staple high-tech exports has been blamed for the recession in the trade-dependent Southeast Asian republic.
The terrorist attacks on the World Trade Center and the Pentagon "have increased the urgency and the scale of measures required" to rescue Singapore, said Yeo.
"Leading indicators suggest that the economy has worsened further and it is likely that the third quarter results will be substantially weaker," Hu said. "Government has therefore been working on a second, more substantial off-budget package."
The official growth forecast currently stands at 0.5 percent to 1.5 percent for 2001, after a 9.9 percent growth in 2000.
"There will be greater uncertainties and all economic forecasts will have to be reviewed" following the U.S. attacks, said Yeo. "At this point, we expect our overall economic growth this year to become negative."
It had earlier predicted up to 20,000 jobs would be lost due to the downturn in the overall economy.
Yeo said the government has no plans to announce a bailout package for national carrier Singapore Airlines, claiming it would be a "very bad principle."