S'pore to impose measures to soften economic downturn
S'pore to impose measures to soften economic downturn
SINGAPORE (AP): The Singapore government said Wednesday it will announce a package of measures within weeks to soften the blow of a sharp economic downturn in the wealthy island city- state.
Minister for Trade and Industry George Yeo gave Parliament few details of the package, saying it will be outlined at the end of the month.
Singapore authorities released economic data Tuesday indicating the republic is the first Southeast Asian nation to fall into a recession since recovering from the 1987/1998 Asian financial crisis.
Yeo said the new measures will not be like the 10 billion Singapore dollar (US$5.46 billion) economic rescue package implemented at the height of the 1998 economic crisis that was meant to restore the country's competitiveness.
"In view of the sharper than expected downturn the government intends to implement some specific measures to cushion its impact on companies and workers," Yeo said.
In light of the data, the government slashed its 2001 gross domestic product growth forecast for the second time this year, saying it believes the economy is unlikely to pick up soon. The forecast now stands at 0.5 percent to 1.5 percent, down from the 3.5 percent to 5.5 percent estimate made in April.
Slower growth in Singapore's major export markets such as the United States, Japan and Europe is contributing to the city- state's poorer economic outlook. Singapore's economy is largely dependent on exports, mainly of electronics.
"The objective of the measures we are working on this time is to ease the burden on companies and workers while we await the recovery of the U.S. economy and the global electronics industry," Yeo told Parliament.
Yeo said that unemployment is also expected to worsen. In March, the unemployment rate was 2.4 percent. About 3,200 people were laid off during the first quarter of this year, up from an "average of 1,900 in the last three quarters of the year 2000," said Yeo.
The Ministry of Trade and Industry reported Tuesday that the economy shrank a seasonally-adjusted 0.8 percent in the second quarter from a year earlier, well below analysts median expectations of a 1.4 percent expansion.
On an annualized basis, Singapore's gross domestic product - a key indicator of economic growth - contracted by 10.1 percent in the second quarter of 2001 compared to the first quarter of the year.
Yeo said it's a "near certainty" that Singapore's economy will contract in the third quarter.
By announcing two back-to-back quarters of economic contraction, Singapore became the first Southeast Nation to officially report a recession.