SINGAPORE: Singapore's Finance Minister, Tharman Shanmugaratnam, cautioned on Thursday that the country's economic growth may remain weak for some time.

The minister was speaking at ST Aerospace's National Day observance ceremony.

Mr Tharman said that these are challenging times, with growth slowing down around the world, and Singapore should be prepared for weakness in its own economy for several quarters.

Economic planners around the world are closely watching the American economy, Mr Tharman continued to say.

"It is still moving down - the cycle," he said. "Some people say it will take as much as another year before the bottom is reached.

"We have to expect continued weakness in the global economy, which might extend into next year and we won't be able to avoid a slowdown if that happens."

"The situation now is different from what it was three months ago. The American economy is in a much more perilous state now and the risks facing the financial system, which is a global system and not just an American system, are still very substantial."

Mr Tharman also said he expects inflation to ease towards the end of the year, not just because of declining oil prices.

"Food prices have also somewhat levelled off. So our expectation is we should be within our latest inflation forecast of six to seven per cent - lower inflation at the end of the year compared to what we saw in the first half of the year."

Meanwhile, Mr Tharman said he is confident that Singapore still remains a strong and fit economy, with investments still coming into the country.

- CNA/yb