S'pore to launch economic measures

S'pore to launch economic measures

HONG KONG (Reuters): Singapore will announce on Monday tax cuts and increases in infrastructure spending in a bid to counter the impact of the region's financial crisis, which is forcing the government to lower its 1998 growth forecast, a newspaper reported yesterday.

It was possible the country could go into recession in the third quarter, Singapore Deputy Prime Minister Lee Hsien Loong was quoted by Hong Kong's South China Morning Post as saying.

"Our businesses are taking some considerable pain," he told the newspaper in an interview on Wednesday. "There are some measures we can take to help tide them over this difficult period."

"It is not to pump-prime the economy, give people pocket money to spend or to completely neutralize the adversity, but something which will be of some assistance in a time of need," he said referring to the off-budget measures to be announced next week.

The measures would include "lower levies and taxes", and "expenditure in specific areas", Lee was quoted as saying.

The stimulus measures would come a week after Hong Kong, often seen as Singapore's arch-rival, launched a multi-billion dollar package to restore confidence in its battered economy, particularly its property sector.

Singapore's package, to be introduced in Parliament on Monday, will include an official downgrade of the country's growth figures for this year from 2.5-4.5 percent. The newspaper gave no revised figures.

Lee, who is also chairman of the country's monetary authority, said it was probable Singapore would achieve positive growth for this year as a whole although a "technical" recession -- two consecutive quarters of negative growth -- might occur.

"Quarter to quarter, GDP (gross domestic product) growth can be volatile and could fulfill the technical definition of a recession, but for a year as a whole I think we will have positive growth," he told the newspaper.