Singapore to grow in 2002, but road is fraught with risks
Singapore to grow in 2002, but road is fraught with risks
Agence France-Presse
Singapore
Singapore's recession-mired economy is forecast to grow 3.8
percent this year and 7.7 percent in 2003, but the road is
fraught with risks, economists from the country's top university
said Tuesday.
Gross domestic product (GDP) is projected to continue to
shrinking up to the second quarter of this year before turning
positive n the second half, the National University of Singapore
economists said in a report at a forum organized by the Institute
of Southeast Asian Studies.
However, economists Tilak Abeysinghe and Choy Keen Meng
tempered their upbeat forecast, saying it depended on a variety
of factors foremost of which is the rate of U.S. economic growth
this year.
Other factors include the fulfillment of targets for a 6.3
percent growth in the global semiconductor industry in 2002 and
21 percent in 2003, stable oil prices and foreign exchange rate,
they said.
"We predict a recovery to positive growth of about four
percent this year -- contingent on a steady pick-up of economic
activity in the U.S. and other key trading partners of Singapore,
and a rebound in global electronics demand," the report said.
"At worst, the Singapore economy will register flat growth in
2002," it added.
The government is forecasting the GDP to growth between minus
2.0 and plus 2.0 percent this year, from a 2.2 percent
contraction last year. GDP grew by 9.9 percent in 2000.
The report warned "the possibility of a worst outcome cannot
be totally discounted -- all it needs is a couple of downside
surprises which are beyond Singapore's control to grip the
economy into another year of recession."
Another risk factor is an "illusory recovery" in demand for
electronics products, Singapore's main exports.
While industry-based sales forecasts are robust, "the speed
and the strength of the rebound in global electronics demand is
subject to considerable uncertainty," the report said.
Other risks to an economic recovery include an over-investment
in information technology, a deadlock in the U.S. Congress over
pump-priming measures and a repeat of the Sept.11 terrorist
attacks in the United States, the report said.