Prime Minister Lee shores up confidence in economy

Lee says the government will continue to support businesses and workers as 'we restructure and upgrade'.

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Singapore PM Lee Hsien Loong say no severe economic downturn in 2016
Lee Hsien Loong Reuters

Singapore Prime Minister Lee Hsien Loong said the government does not think the country will slide into a severe downturn similar to that of 2008.

Making the traditional Chinese new Year message on Sunday, Lee said, however, the city states' economic outlook for the year remained grim amid global uncertainty.

"I know that the economic outlook is filled with uncertainty. The world economy is slowing, and even China's economy is softening," Lee said.

Singapore's trade-dependent economy is hit hardest by a slowdown in China, which is its major trading partner.

The city state's economy grew 2.1 percent in 2015, which was its lowest pace of growth since the 2009 crisis.

Several market surveys and economic data sets revealed in recent weeks that the business sentiment in Singapore was downbeat.

Singapore's manufacturing output dropped for an 11th consecutive month in December, data showed last week. The worst decline was in the transport engineering cluster, folllowed by electronics.

Data showed in January the prices of private property in Singapore fell 3.7 per cent in 2015, following on a 4 per cent decline in 2014. Rentals of private residential properties have also fallen on a similar scale.

According to data released last week, Singapore added fewer jobs in 2015 than any other year since 2003.

The city state, which is an attractive destination for global talent, created only 31,800 additional jobs last year, making it the worst year since 2003 and indicating that the global economic slowdown has visible impact on the island economy.

However, the prime minister said the government will support businesses and assured that employment opportunities will be created.

"We do not expect a severe downturn, like the global financial crisis in 2008 ... The government will continue to support businesses and workers as we restructure and upgrade," Lee said.

This article was first published on February 7, 2016