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.