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Singapore economy projected to grow at modest pace of 1-3% in 2016: Iswaran

TODAY reports: In a speech at the Singapore Chinese Chamber of Commerce and Industry's Chinese New Year gathering, Minister for Trade and Industry (Industry) S Iswaran said the economy for this year is likely to remain slow due to cyclical and structural factors.

SINGAPORE: The “lively, flexible, quick-witted and versatile” qualities of the monkey are precisely what Singapore need to navigate what is shaping up to be a challenging year of the Fire Monkey, Minister for Trade and Industry (Industry) S Iswaran, said on Monday (Feb 8).

In a speech at the Singapore Chinese Chamber of Commerce and Industry (SCCCI)’s Chinese New Year gathering, Mr Iswaran said the economy for this year is likely to remain slow due to cyclical and structural factors like the continued slowdown in the Chinese economy, weakening growth momentum in the US, and in-sourcing trends in major markets.

“Last year, our economy grew at its slowest pace since the Global Financial Crisis in 2009. The sluggish economic environment is likely to persist this year,” he said. Against this backdrop, he said that the Singapore economy is projected to grow at a modest pace of 1.0 to 3.0 per cent this year.

However, Mr Iswaran said “the situation is not all gloomy”.

For example, he said lower oil prices, though adversely affecting some industries, mean lower energy costs for a broad range of businesses.

Meanwhile, unemployment remains low and there are still short and long term opportunities to be seized in regional markets and sectors like advanced manufacturing, logistics, healthcare, digital and urban solutions, he said.

Addressing calls for a fresh boost of government support for business in the current economic environment, Mr Iswaran made clear that this is different from the economic situation in 2008 when there was risk of a major global recession bringing down Singapore's economy. As Singapore deals with short term challenges, he stressed that it is crucial that for businesses to press on with our longer-term economic restructuring to become more innovative, productive and manpower-lean.

“We must keep a steady foot as we proceed with alertness and caution," he said. "That is the surest path to staying competitive, achieving sustainable growth over the long-term, and seizing opportunities when the economic environment improves, as it will."

Moving ahead, Mr Iswaran said the Government will continue to provide strong, targeted support to small and medium enterprises to help build their capabilities for internationalisation and innovation. The Committee on the Future Economy will also consult closely with the business community to chart the longer-term course for Singapore’s economic growth.

Over the past year, the SCCCI organised 18 dialogue sessions between its Trade Association members and government agencies. Through these sessions, the associations worked with government agencies to jointly address key business challenges faced by their members, including industry land-use, compliance costs, and rising rentals.

The SCCCI recently submitted a comprehensive Pre-Budget 2016 Survey Report with several recommendations for the Government to consider — one of which is to simplify paperwork for business grants, and expedite grant disbursement processes. Mr Iswaran today said government agencies have been actively working to further streamline processes.

“SPRING and IE Singapore have already rationalised their grant programmes into two umbrella schemes – the Capability Development Grant for innovation and domestic capability development, and the Global Company Partnership for internationalisation,” he said. “The upcoming rollout of the Business Grants Portal will further allow businesses to easily identify, apply for and manage their business grants, and enable SMEs to more easily benefit from government programmes.”

Read the original TODAY report here.