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Monday, 14 September 2009

SM Goh says prospect for world economy will be one of slow recovery

SINGAPORE : Singapore’s Senior Minister Goh Chok Tong has said the prospect for the world’s economy will be one of slow recovery.

But countries should also watch out for the danger of inflation in their use of stimulus packages.

In an interview with Xinhua news agency during his recent visit to China, Mr Goh said some people felt that there is still a danger of another dip.

That is because the financial problems of some banks and some countries are not over yet.

But he added that his own view is that economies of countries affected are more likely to be crawling forward.

Mr Goh said: "So we are recovering from the stimulus package. But unlike a ball that has fallen from a height, the person does not bounce back; whereas a ball, if it drops from a very high position, is going to bounce up."

In the interview, Senior Minister Goh said that China could also stimulate domestic demand to support its own growth.

Mr Goh added that he liked the emphasis given by China’s Premier Wen Jiabao on spending on the medical sector, as that meant looking after the people and making sure that their medical needs in the longer term would be taken care of.

Also important is the the emphasis on education — investing in people as they can become much more productive and more skilled for the next phase of economic growth.

Senior Minister Goh went on to explain that the United States would still be the largest market. But the US consumer will in future begin to put more emphasis on saving, which will mean less demand for goods.

Mr Goh added that China was in a position to make up for this fall in demand in the US, as China could take the lead in creating some power for growth in Asia, which will then benefit the world. — CNA/ms

1 comment:

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