BT : PM Lee sounds caution over GDP figures

Business Times - 15 Apr 2010

PM Lee sounds caution over GDP figures

'I fear these headlines - red hot figures, out of the woods,' he says

By CHEW XIANG
IN WASHINGTON DC

PRIME Minister Lee Hsien Loong said that he was pleased with Singapore's spectacular economic growth in the first quarter but cautioned against getting carried away.

'I fear these headlines - red hot figures, out of the woods,' Mr Lee said in Washington DC, where he was attending the inaugural Nuclear Security Summit and he also met key US officials. 'We are happy with the result of course, a remarkable recovery from a year ago . . . but it's really a rebound from the downturn last year,' Mr Lee said.

'We're lucky it's turned out more like a 'V-shaped' than an 'L-shaped' recovery, (but) I don't think it's going to continue like this indefinitely because it's not possible for us to continue expanding like this.'

The Ministry of Trade and Industry now expects GDP to grow 7-9 per cent this year, up from between 4.5 and 6.5 per cent. Inflation projections were also raised by half a percentage point, to between 2.5 per cent and 3.5 per cent this year.

Mr Lee said inflationary pressures were due to higher energy prices and higher vehicle Certificates of Entitlement (COE) prices but he did not see 'broad-based' pressures on food, clothing, education services and daily necessities.

Soaring property prices and the 'very effervescent' mood in the housing market prompted a raft of measures in recent months to curb speculation and Mr Lee said that the government would be watching closely over the next few months to see if more action was needed. 'If we need to, we will. We have some instruments (available),' he said. Mr Lee said that the Nuclear Security Summit - which ended on Tuesday after some 50 world leaders signed off on an agreement to secure nuclear material within four years - was 'an important but not urgent' subject, but one which should be on the global agenda.

As a major port, Singapore plays a crucial role in intercepting illicit shipments of nuclear material and curbing nuclear terrorism. Mr Lee said earlier that several successful interdictions had been made - but noted yesterday that other countries also needed to make commitments. 'If we take (our duties) seriously, and others don't', then illicit materials will move into second-tier ports, he said. But crackdowns on radioactive material that could be used by terrorists would likely not affect Singapore's possible plans to utilise nuclear power. Modern reactors use low-grade uranium which can't be used for weapons, he said.

Mr Lee left for Chicago later yesterday where he will address the Chicago Council on Global Affairs on the second leg of a week-long US trip.

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One for the album: (from left) Spanish Prime Minister Jose Luis Rodriguez Zapatero, Mr Lee and German Chancellor Angela Merkel at a photo session at the Nuclear Security Summit