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Economy beats expectations with 3.3% growth in 2018: PM Lee

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Growth is likely to be in the range of 1.5 to 3.5 per cent in 2019, in line with the Ministry of Trade and Industry’s forecast.

SINGAPORE’S economy performed above expectations to grow 3.3 per cent in 2018, close to that in 2017, Prime Minister Lee Hsien Loong said in his New Year Message on Monday.  

Growth is likely to be in the range of 1.5 to 3.5 per cent in 2019, in line with the Ministry of Trade and Industry’s forecast.

But Mr Lee cautioned that there are major uncertainties in the global economy going forward, with growing trade conflicts, nervous financial markets and signs of slower growth.

The steady 3.3 per cent year-on-year expansion achieved last year – a “productive year for Singapore”, according to Mr Lee – was nearer to the upper range of MTI’s forecast of 3.0 to 3.5 per cent.

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Being highly open, Mr Lee said, Singapore is exposed to similar pressures many countries face. But it has continued to progress, while in these countries wages grew stagnant, lives have not improved and their political systems malfunctioned.

“We have coped better than most countries because we have worked closely together to improve the lives of all Singaporeans,” Mr Lee said.

He noted that in Singapore, the economy has expanded, unemployment stayed low and incomes have risen across the board. Good jobs were also created and Singaporeans are prepared for them.

“Crucially, the government is focussed on people’ concerns, and working with citizens to create a better tomorrow for all,” Mr Lee said.

He highlighted the improvements made in Singapore’s health care, education, housing and public transport, stressing that these are critical investments in the country’s future which require steady and capable leaders to realise – leaders “who can rally Singaporeans to progress and prosper together”.

Mr Lee said “significant headway” was made in leadership succession in the past year.

There was a Cabinet reshuffle in May and younger political office holders are being exposed to different responsibilities and are working as a team.

They have settled on Heng Swee Keat as their leader, and supported Mr Heng’s choice of Chan Chun Sing to be his deputy.

“This is a good outcome,” Mr Lee said. “It gives Singaporeans and foreigners alike confidence that Singapore will be in good hands over the long term, beyond the working lives of me and my senior colleagues.”

He said Singaporeans have a vital role to play in the succession. “I ask you to work with the younger political leaders, to form the best team for Singapore.”

Singapore’s model of governance is quite exceptional and has served its people well, according to Mr Lee. “It has enabled Singapore to make the most of what we have and stand out in a highly competitive world.”

Singapore politics “cannot afford to be riven and destabilised by the rivalries, contestations and factions so often seen elsewhere” he said.

“Instead Singaporeans must stay united and work together resolutely to strengthen and renew our social compact.”

Externally, Mr Lee indicated that Singapore’s diplomats and officials have been busy flying the country’s flag – and he singled out Singapore playing host to the historic summit between US President Donald Trump and DPRK Chairman Kim Jung Un; and Singapore chairing Asean to launch practical initiatives to boost regional stability and integration as the highlights of Singapore’s role on the international stage.

Mr Lee reminded that US-China ties continue to cause concern – and the tensions created would make it harder for countries to be friends with both.

“If countries are forced to choose sides, the open and connected global order will be further divided, hurting one and all,” he said.

Mr Lee said Singapore is “tending” relations with its immediate neighbours. “Relations with Indonesia have been positive, with significant cooperation and investments flowing in both directions.”

On Malaysia, which has a new government, he said “we hope to maintain a constructive partnership with Malaysia and look forward to the new leaders on both sides developing good working relations with one another”.

“Nevertheless, several issues have recently arisen between us, as they will from time to time between two close neighbours tightly bounded by history, economics, culture and kinship,” Mr Lee indicated.

He said Singapore has worked with Malaysia to accommodate its needs when the latter wanted to defer the High Speed Rail project. But harder to resolve are the new disputes on maritime boundaries, following provocative intrusions into Singapore’s territorial waters; and on airspace, particularly the Instrument Landing System rules for Seletar Airport.

Mr Lee noted that Malaysia also wants to revise the price of Johor water, an old issue recently revived, on which Singapore’s stand is quite clear.

“We will deal with all these matters calmly and constructively,” he said. “Singapore and Malaysia must manage specific problems, however difficult, while preserving the overall relationship,” Mr Lee said.

The way to do so is through equality and mutual respect, upholding international commitments and the rule of law, he added.

“Older Singaporeans will remember that this is how we dealt with previous rough patches in bilateral relations,” Mr Lee said. “Each time we would unite as one people and stand our ground calmly but firmly.”

Mr Lee said he is “confident that this time too Singaporeans will work closely together to keep relations with Malaysia stable, and a new generation will learn how to collectively protect our vital interests while living in peace and friendship with our neighbours”.