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2017 growth hits 3.5%; PM looks to new year with confidence

Figure is more than double initial forecasts; economists see continued trade-driven lift in 2018

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Singapore's economy expanded 3.5 per cent in 2017 - more than double initial forecasts - thanks to an upswing in global growth, Prime Minister Lee Hsien Loong said in his New Year message on Sunday.

Singapore

SINGAPORE'S economy expanded 3.5 per cent in 2017 - more than double initial forecasts - thanks to an upswing in global growth, Prime Minister Lee Hsien Loong said in his New Year message on Sunday.

While 2017 "has been a good year", Mr Lee said, Singapore must continue strengthening its position at home and abroad to gear up for the challenges that 2018 will bring.

The Singapore economy, which grew 2 per cent in 2016, picked up pace in 2017 on the back of surging global demand for electronic gadgets. Economists expect this trade-driven lift to continue in the new year.

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The Ministry of Trade and Industry's (MTI) 2017 growth has been progressively upgraded over the year. The official prediction, which was between 1 and 3 per cent in February, has stood at between 3 and 3.5 per cent since November.

MTI will release advance estimates for the fourth quarter and full-year 2017 on Tuesday morning.

"Incomes have gone up across the board, especially for low and middle earners. We have benefited from the global economic upswing," Mr Lee said.

"But more fundamentally, our productivity has grown. Singaporeans are upgrading and learning new skills, while businesses are innovating and adopting new technology. That is how we will stay competitive and ready for the future."

Mr Lee said that 2017's strong showing came despite uncertainties at home and abroad, including worries about security and terrorism, as well as a new administration in the United States "with a radical approach to international trade and foreign policy".

Amid these challenges, Singaporeans "made steady progress on our long-term goals, and are finishing the year stronger than we started", Mr Lee said. "We are ushering in 2018 with confidence and strength."

Still, he warned that the external environment will remain uncertain in 2018. Tensions on the Korean peninsula are a source of growing tension and anxiety. Extremist terrorism also remains a present danger.

The United States' approach towards Asia, the Middle East and the rest of the world has yet to be fully articulated, he noted.

"We hope to keep relations with our immediate neighbours steady as they gear up for elections - Malaysia this year, and Indonesia the next."

In addition, Singapore will take over chairmanship of Asean in 2018 and hopes to take the regional bloc forward under the themes of "resilience" and "innovation".

Singapore will also be pressing on with economic restructuring plans in the coming year.

The Future Economy Council is working closely with unions and businesses to implement Industry Transformation Maps and help the workforce adapt for the future, said Mr Lee. More preschools are being built, and healthcare facilities are expanding. Singapore will also work to meet its environmental commitments under the Sustainable Singapore Blueprint and the Paris Agreement.

On the infrastructure front, the agenda includes improving rail reliability and growing the MRT network. Other major projects in the works include Changi Airport Terminal 5, the Tuas Megaport and the High Speed Rail link to Kuala Lumpur.

The Parliamentary calendar will also be busy, Mr Lee said.

Parliament will go on a short mid-term break after the Budget sitting. When a new Parliamentary session opens in May, the government will lay out its agenda for the remainder of its term.

"This will bear the imprint of the fourth-generation leadership, who are taking on greater responsibilities, and putting forth their ideas for Singapore."

Mr Lee also set the stage for an upcoming milestone in 2019 - the 200th anniversary of the landing of Sir Stamford Raffles in Singapore.

Describing Raffles' arrival here in 1819 as "a key turning point", Mr Lee noted that the founder of modern Singapore "set Singapore on a different trajectory, which brought us to where we are today".

"Had Raffles not landed, Singapore might not have become a unique spot in South-east Asia, quite different from the islands in the archipelago around us, or the states in the Malayan Peninsula.

"But because of Raffles, Singapore became a British colony, a free port and a modern city."

Singapore "should commemorate this bicentennial appropriately", just as the country marked the 150th anniversary in 1969, Mr Lee added.

"It is an important milestone for Singapore; an occasion for us to reflect on how our nation came into being, how we have come this far since, and how we can go forward together."

The newly-created Singapore Bicentennial Office in the Prime Minister's Office said ministers Josephine Teo and Desmond Lee are overseeing the plans for the Singapore Bicentennial, with Finance Minister Heng Swee Keat as adviser.