S'pore should avoid 'harsh contraction'

S'pore should avoid 'harsh contraction'

SINGAPORE (Reuters): Singapore should avoid a harsh economic
contraction in 1998 to see growth sit within the government's
forecast of 0.5 percent to 1.5 percent expansion, U.S. embassy
officials said in a report yesterday.

"The Singapore economy should be able to avoid a contraction
for 1998 as a whole, provided the regional crisis does not take a
severe turn for the worst," said the July report from the
embassy's economic and political section.

"We believe that Singapore's full year 1998 GDP (gross
domestic product) growth rate should settle within the
government's revised estimate of 0.5 percent to 1.5 percent."

The report said negative growth should be sidestepped by
modest second half growth in construction, finance and business
services, transport and communications.

But the crisis would take its toll on inward investments to
Singapore, particularly in the manufacturing sector which
attracted foreign commitments of about US$4 billion in 1997, some
40 percent or US$1.6 billion of which came from the United
States, the city state's biggest foreign investor.