senior singapore minister pessimistic on singapore growth prospects 1360222015

Singapore’s senior Minister of State for Trade and Industry Lee Yi-Shyan struck a somewhat downbeat note on the country’s growth prospects at the 12th China-ASEAN Expo in Nanning, China.

Speaking on the sidelines of the exposition, Mr. Lee warned that Singapore’s economic growth could be adversely impacted due to the slowdown in China and the resultant decline in its demand for exports from Singapore.

His comments come in the backdrop of global jitters unleashed by the US Fed’s unexpected and detailed reference to worldwide economic growth and, in particular, China. The US Fed’s pronouncements are usually focused on the domestic economy. "The question is whether or not there might be a risk of a more abrupt slowdown than most analysts expect," Yellen warned while speaking to reporters.

"Heightened concerns about growth in China and other emerging market economies have led to notable volatility in financial markets," Yellen also said.

Singapore’s non-oil domestic exports plunged 8.4 per cent year-on-year in August, much worse than the 0.7 per cent decline recorded in the previous month. Mr Irvin Seah, a senior economist at DBS, said that the main drag on Singapore’s exports came from Korea, Taiwan and predominantly, China, which he said was “going through a sharp deceleration in its growth momentum.” Analysts are warning that Singapore is in imminent danger of tipping over into a technical recession.

Mr Lee, too, warned that China’s slowdown was bad news for Singapore, though he did not offer a comment on how long the difficult times could be expected to last, according to Channel News Asia.

"We have to be realistic in Singapore given that we have all these domestic consideration in terms of workforce growth in terms of having a stable labor market, then you have to really accept that growth will be slow – but hopefully there will be qualitative growth that rewards workers with increasing wages," said Mr Lee.

Interestingly, Mr. Lee said that feedback from companies operating in China revealed that some were even suffering zero to negative growth.

Mr. Lee suggested that, to deal with the situation, Singapore companies should reinvent their business models and explore new markets in ASEAN.

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