SINGAPORE: Trade and Industry Minister Lim Hng Kiang has said the country is set for several quarters of slower growth. Speaking in Parliament on Monday, Mr Lim said this could stretch on for longer, depending on the state of the global economy.
Singapore, an open economy, cannot escape the impact of the financial crisis and the global economic slowdown. It is already in a technical recession and there are signs this is affecting the job market.
Mr Lim said: "The slowing economy and more cautious hiring have contributed to an increase in the overall unemployment rate from two per cent in March 2008 to 2.3 per cent in June 2008."
Mr Lim said that the unemployment rate for this year is likely to be higher than the record low of 2.7 per cent in 2007.
For now, he said retrenchments are still unchanged from previous quarters.
The financial turmoil has hit the property, retail and tourism industries. For the construction sector, Mr Lim said it is expected to grow by 7.8 per cent in the third quarter of this year, falling short of the 18 per cent growth registered in the first half of 2008.
And construction on projects like the Downtown mass rapid transit line is expected to contribute strongly to the economy, but the slower growth is due to weaker market sentiments, contractor shortage and equipment delays.
Still, government projects will add S$13.5 billion to the economy this year and the government will bring forward more public sector projects, if needed.
While Singaporeans shopping for daily necessities found higher prices for basic goods this year, Mr Lim said inflation has peaked, so costs will come down, though there will be a lag.
He said: "I must caution that inflation will continue to be sticky in the next few months because some of these costs have a certain amount of lag. But going into the next year, over the next 15 months, both MAS and MTI are confident that our inflation will revert to the more normal two to three per cent that we saw previously."
For professional workers, Mr Lim is hopeful as foreign companies like Halliburton and Qualcomm launch their Singapore operations this quarter. - CNA/vm