Singapore will have done well if it can grow 2-3% annually for next 5 years: PM Lee

The Singapore economy has reached a stage of its development where it is no longer possible to expand by 5 to 6 per cent each year, said Prime Minister Lee Hsien Loong.

The country will have done well if it manages to achieve annual GDP growth of 2 to 3 per cent for the next five years, Mr Lee said in an interview with the Singapore media at the Istana on Wednesday.

"Domestically, we have to get used to what that means. Three per cent (growth) per year means wages will go up correspondingly, gradually, year by year. Maybe not every year, but over four to five years you will see improvements if we are successful in our policies," he said.

Mr Lee said that while Singaporeans have to accept a slower pace of growth, the government would do all it could to help people through this period of economic restructuring.

The state is already doing more for the low-income groups here, while it has kept the tax burden down considerably for the middle-income earners.

"What you earn, you keep, rather than (the government) spends on your behalf. If we can maintain that, then we can improve lives progressively. If we cannot maintain that, we will go to zero growth. Then, I think we will have a problem," said Mr Lee.