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SINGAPORE: The Republic is five years into its
economic restructuring drive, which was set in motion by the Economic
Strategies Committee in 2010.
The target is to lift productivity growth to 2 to 3
per cent per year by 2020 and to raise the median income level by 30 per cent.
Facing global cyclical headwinds, as well as
domestic structural challenges, the Singapore economy is slowing this year to
its lowest rate of growth in six years.
Right up to May 2015, Singapore kept its official
growth forecast to between 2 and 4 per cent. In August, this was trimmed to
between 2 and 2.5 percent, and just last month, it was cut again, to close to 2
per cent.
As for next year, growth is forecast at between 1
and 3 per cent.
With the global outlook still cloudy, Nomura
Singapore said should growth come in much lower than expected, the authorities
may relax earlier measures taken to dampen parts of the economy.
Said Nomura Singapore’s Southeast Asia economist
Brian Tan: "It is possible that some of the cooling measures in the
property sector could be unwound. For example, the additional buyer's stamp
duty could be reduced or removed. On the foreign worker policy, we don't think
they will necessarily reverse the tightening that has already been done, but it
is possible that a worse-than-expected growth outcome could led them to
possibly delay further tightening that has already been scheduled."
But DBS said, rather than unwind the
macroprudential measures it has taken, the Singapore Government is more likely
to provide stimulus measures in the event of a sharp slowdown.
Said DBS’ Senior Economist Irvin Seah: "There
could be more help, assistance, support to boost revenues for companies, and to
encourage companies to internationalise. I think this is essentially what I
think will be the focus for the second phase of restructuring."
The first five years of restructuring saw small and
trade-independent Singapore impose curbs to rely less on low-cost foreign
manpower and to depend more on productivity-driven growth. In an update in
November, the Trade and Ministry Industry said that productivity growth is
within the Government's 2 to 3 per cent target range for productivity growth
over the 10 years from 2009.
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