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THE economy grew 3.5 per cent in the first half of the year, but the pace is likely to ease in the second.
In disclosing the year-on-year growth figure for January-June in his National Day Message last night, Prime Minister Lee Hsien Loong also indicated that the official full-year growth forecast has been narrowed from 2-4 per cent to 2.5-3.5 per cent.
This means that economic growth in the remaining July-December months is not expected to exceed 3.5 per cent. And growth for the full year will be below last year's 4.1 per cent.
In his National Day Message last year, Mr Lee also announced a revision of the full-year growth forecast for 2013, from 1-3 per cent to 2.5-3.5 per cent. In any case, private-sector economists have come to expect Mr Lee to give an update of these economic numbers in his National Day Message. This year, they tipped him to narrow the range of the growth forecast.
The economists, who had projected full-year growth at around 3.8 per cent in 2014, saw the move coming after GDP growth tumbled by over half to 2.1 per cent in the second quarter, down from 4.7 per cent in the first quarter.
CIMB's Song Seng Wun, UOB's Francis Tan and Mizuho's Vishnu Varathan expect growth contraints to remain in the months ahead. These include domestic headwinds from restructuring and credit pressures as well as geopolitical risks of the warfare and disease kinds.
Mr Song, who had correctly predicted that the full-year growth forecast would narrow to 2.5-3.5 per cent, pointed out yesterday that it's clear by now the European and American economies are not picking up as fast as expected.
The trade-dependent tech sector, which accounts for a third of manufacturing output, will continue to be a drag on the Singapore economy, he said. And the recent drop in Chinese tourists will only spell more bad news for the domestic services sector, which is already soft.
Weaker growth in the United States, China and several key emerging economies has already led the International Monetary Fund last month to trim its 2014 global growth forecast to 3.4 per cent from 3.7 per cent. Still, 2.5-3.5 per cent growth is not bad - and the growth is needed to produce good jobs and fulfilling careers, according to Mr Lee in his National Day Message to Singaporeans. "We must keep up this growth over the next decade to help you improve your lives."
In his message, Mr Lee also said that the government was studying how to make it more convenient for retirees to get cash out of their flats, "in a prudent and sustainable way". He said that he would speak about how to improve the Central Provident Fund at the National Day Rally next week, in particular, on how to make the CPF better in helping Singaporeans to save for old age.
The anxieties of the old and the aspirations of the young - these are two concerns that took up much of Mr Lee's National Day Message last night. And he pointed out the many efforts that the government is making to assist them.
In helping young Singaporeans to realise their potential, Mr Lee said that it was not just a matter of continuing education and training. "It's also a matter of social values."
Singaporeans should not judge a person by his paper qualifications, but also by his skills, contributions and character. "This is how we keep Singapore a land of hope and opportunity for all," he said. "We are now at a higher level, from which we can scale new heights. Hence, we must reassess our position, review our direction and refresh our strategies."