|By Alvin Foo|
PM Lee said the eye of the economic storm has passed for Singapore but the outlook beyond the third quarter is still unclear. -- ST PHOTO: JOYCE FANG
SINGAPORE is well-positioned to pick up strongly when the global economy recovers because of its comprehensive and decisive response to the downturn, said Prime Minister Lee Hsien Loong on Sunday night.
Giving an update on the economy amid signs of global recovery, Mr Lee said the economy is in a 'deep trough', but Singapore is coping well.
'Because of our comprehensive, decisive response to the downturn, we can be confident of our future,' he said in his National Day Rally speech at the University Cultural Centre.
The resilience package unveiled during January's Budget has worked, and there is no need for a 'new prescription' now, he told the gathering of politicians, grassroots and business leaders, among others.
PM Lee said the eye of the economic storm has passed for Singapore but the outlook beyond the third quarter is still unclear.
Although the economy contracted 6.5 per cent in the first half year, it was not as bad as feared, said PM Lee.
Last week, the Government released economic growth data which showed a 20.7 per cent rise in the second quarter over the first quarter's figure.
Mr Lee said the labour situation has stabilised and some companies are hiring again, although in small numbers.
'The third quarter should be alright,' he told the gathering.
But sounding a note of cautious optimism, he said: 'Beyond that, the outlook is still unclear.'
For instance, there are no signs of Christmas orders rushing in yet. Also, companies which have asked their staff to go on compulsory leave or shorter work week, have reduced their output but not headcounts.
While this is alright for the short term, it is unclear how long these firms can hold on to extra workers, said Mr Lee, adding that if the recovery is delayed, they may have to downsize.
Mr Lee said Singapore can still grow even if there is a subdued global recovery, by sharpening its skills and expanding its market share, even if world markets are not enlarging quickly.