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SINGAPORE : Singapore will announce advance estimates of how the economy fared during the second quarter on July 14.
Ahead of that, Finance Minister Tharman Shanmugaratnam has tempered expectations by saying that the global economy is not yet in a recovery mode. But he also said he believes that the worst is over.
Giving a keynote address at the Nomura Asia Equity Forum on Tuesday, the minister also called on governments worldwide to focus on micro-economic reforms, such as introducing more affordable healthcare and making imports more attractive, going forward.
The Finance Minister said these are just some of the many microeconomic reforms which countries should undertake to increase domestic consumption for the long run.
Mr Tharman said: "The macro story worked well for a year, but is not sustainable as well as undesirable if continued year after year. We cannot try too hard to keep growth up.
"The micro story is desirable. The real reforms in social security and health insurance, in removing import tariffs and other forms of indirect barriers so as to allow imports to get in cheaper, and to help consumers - that story is real, but it takes time."
In addition, Mr Tharman said Asian economies should not let up on structural reforms like education and training.
He noted that between 2002 and 2007, a bubble was formed due to exports and current account imbalances.
He said: "While the buildup of current account surpluses during the bubble years may have had something to do with excessively low interest rates in the US, the argument is overstated.
"And more importantly, the situation that existed before the bubble years is not one which contributed to global macroeconomic unsustainability - it didn't contribute to macroeconomic instability. So going back to that situation is not a bad place to be."
The Finance Minister also said it is in everyone's interest that Asia stays engaged in the global economy. Asian countries, he added, should continue to export globally while boosting their own domestic demand and reducing import barriers.
Going forward, Mr Tharman said economies should accept lower growth rates in this new world, as US households save more in order to pay down their debts. And that growth will be dependent on microeconomic reforms to raise productivity, higher wages and increasing consumer confidence. - CNA /ls
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