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SINGAPORE: Singapore is unlikely to sink back into recession but economic recovery this year is expected to be sluggish, Trade Minister Lim Hng Kiang said Monday.
The consumption-boosting effects of government stimulus packages implemented at the height of the global economic slump are waning and continued high unemployment in the United States will hurt demand for Singapore exports, he said.
However, Mr Lim said in parliament: "A double-dip recession is not likely."
He added: "The recovery in 2010 is expected to be uneven. The risk of a return to recession is low in the absence of further financial shocks."
Lim said "growth momentum in the second half of 2010 may slow down as the effects of global fiscal stimulus measures and inventory restocking wane.
"In addition, weak household balance sheets and persistently high unemployment, especially in the US, will weigh down on consumer demand in our key export markets."
The US Labor Department said Friday US employers cut a worse-than-expected 85,000 jobs in December while unemployment held at 10.0 per cent, dashing hopes for a quick rebound in the world's biggest economy.
Singapore's trade reliant economy shrank 2.1 per cent last year after slipping into a severe recession in the third quarter of 2008 due to the impact of the global economic crisis.
Lim repeated figures stated by Prime Minister Lee Hsien Loong on New Year's Eve that the economy is expected to grow between 3.0 and 5.0 per cent this year.
"External demand will continue to grow (in 2010) but at a sluggish pace," he said.
- AFP/yb
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