Singapore—At the tail end of his visit to South Korea for the ASEAN-Republic of Korea (ROK) Commemorative Summit, Prime Minister Lee Hsien Loong took a few minutes to talk to the press about next year’s national Budget, saying it would be “strong, and suitable to the state of the world” as well as “what the Singapore economy needs.”
PM Lee said that Heng Swee Keat, the country’s Finance Minister as well as Deputy Prime Minister, together with other related agencies are hard at work in preparation for Budget 2020.
He told reporters, “Heng Swee Keat as Finance Minister and all the other agencies, are working towards preparing a Budget which will be strong, and suitable to the state of the world and what the Singapore economy needs.”
Global economic conditions are of prime consideration. As the national economies of China, Japan, and the United States have experienced a slowdown, it should come as no surprise that the same holds for Singapore as well.
However, whether or not the economy goes into a recession has to do with external factors, according to the Prime Minister.
“Whether we tip into a recession or not, that depends a lot on external factors. We don’t know whether the American economy will tip into a recession, it may. The risks seem to have gone up. But right now, the indicators are mixed,” Channel NewsAsia (CNA) quotes him as saying.
The Prime Minister added, “For example, if you have a problem worsen between America and China, or you don’t have a solution and the current uncertainties continue, they could go into a recession within the next 12, 18 months. And then, if that happens, we are in a greater risk, So we are watching this.”
The Straits Times (ST) quotes him as saying, “The risks seem to have gone up, but right now the indicators (for Singapore) are mixed and unemployment is still low.
Corporate profits are not as buoyant as before, the leverage is going up, corporate borrowing is going up. Depending on what external shocks may happen – for example, if you have a problem worsen between America and China, or you don’t have a solution and the current uncertainties continue, they (the US and China) could go into a recession within the next 12 to 18 months. If that happens, we are in greater risk.”
The answer, he said, would not be found in a pump-priming stimulus, but what the country needs to do is make the most of its time during a slowed economy to invest efforts in upgrading, training and productivity improvements.
“The markets may not be there yet because when you have a big cloud hanging over you, nobody wants to make commitments. They want to see what happens on Brexit, US and China. Even in this part of the world between Japan and Korea, there are troubles. So we have to understand that those clouds also affect our weather, our climate – and we are preparing for that.”
PM Lee has been in South Korea over the past few days for a meeting with President Moon Jae-in in Seoul as well as the ASEAN ROK Summit, which was held in Busan.
He returned to Singapore on Wednesday, November 27. /-TISG
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