SINGAPORE: Political-watchers and economists in Singapore said the Prime Minister's New Year message will help to manage expectations of Singaporeans in 2009.

They said it is important for Singaporeans to realise that times are going to be tough and to band together to ride out the economic storm – a point that was stressed in PM Lee Hsien Loong's message on Wednesday.

Assistant Professor Eugene Tan, Singapore Management University, said: "What is crucial this time round is that the prime minister has noted that the whole of society needs to work together... so it's not just about the government putting its best foot forward, but Singapore working together as a whole."

As for companies, a veteran parliamentarian has suggested that apart from measures to help with business costs, more has to be done - such as cutting the Goods and Services Tax (GST).

Ang Mo Kio MP Inderjit Singh, who is also the chairman of the Government Parliamentary Committee for Finance, Trade and Industry, said: "My rationale for a GST reduction is not to stimulate demand, but to trigger a series of costs reduction.

"Psychologically, if the government can lead the way by reducing GST, then everyone else can follow suit to reduce costs.

"The other way the government can be mindful of is how they can bring down costs under their control, like rentals of government buildings and offices."

Feedback sessions with grassroots leaders and citizens have also suggested that Singaporeans are looking forward to some cost-reduction measures, said Mr Inderjit.

He said: "For government to advance some help by way of new Singapore Shares or through utility rebates and service & conservancy rebates, this will come in very useful to help them manage their cashflows."

Economists said Singapore's 2008 growth figure of 1.5 per cent was well below their expectations. The earlier official estimate for this year was 2.5 per cent.

Song Seng Wun, CEO and regional economist, CIMB-GK Research, said: "I suspect it's an across-the-board deceleration of growth momentum. We certainly have seen a contraction in the manufacturing sector because of the slump in external demand. Anything that we had seen so far suggested that the numbers would be weak, but we didn't know it would be as bad as this."

Singapore's Trade and Industry Ministry will give a fuller picture of the growth figures for 2008's fourth quarter and for the whole year on Friday.


- CNA/so