Double-dip recession unlikely: MTI

Growth momentum and opening of IRs bode well for S'pore economy

SINGAPORE is unlikely to slide back into recession, according to a senior official from the Ministry of Trade and Industry (MTI).

Mr Keith Tan, director of MTI's economics and strategy division, said yesterday that an expected strong Asian recovery coupled with this year's low base from which to measure next year's growth, meant that the chance of a double-dip or W-shaped recession was 'quite low'.

Speaking on the sidelines of the MTI Economic Dialogue 2009 at the Singapore Management University (SMU), Mr Tan said the mathematics of base effects, as well as the economy's growth momentum and the opening of the integrated resorts next year, boded well for Singapore staying out of recession - barring unforeseen shocks to the system.

He told The Straits Times that the Government's move to scale down the Jobs Credit scheme - announced by Prime Minister Lee Hsien Loong yesterday - 'must indicate that we're fairly confident about the economy and how the job market should see some recovery next year'.

Mr Lee said that the scheme was to be extended for six months to next June, but with lower payouts.

Mr Tan said: 'On the one hand, we didn't want to scale back the Jobs Credit scheme all the way, because we're not certain about how the second half will pan out.

'On the other hand, we know that we are in a recovery - we're quite confident about that - so it seems unjustifiable to continue sustaining the scheme throughout the year.'

The question of how much governments should intervene in the economy was also touched upon by Minister for Trade and Industry Lim Hng Kiang, who spoke at yesterday's dialogue session.

Addressing about 200 students and faculty from the three local universities, Mr Lim said proper and rigorous economic analysis is essential for governments to understand markets and to act accordingly.

While the study of economics is not perfect, it has yielded useful insights for a variety of public policy issues, he said.

International economics has been used to set monetary policy, cost-benefit

analysis has helped determine which industries to bring into Singapore, and behavioural economics has played a part in reducing energy consumption and dealing with climate change, he said.

Also at the event, Mr Lim presented the MTI's Economist Service Awards to outstanding economics students from each of the three local universities.

The MTI Best Thesis Prize went to Mr Harvey Cheong from the SMU; Ms Han Yi from the National University of Singapore (NUS); and Mr Chiam Yee Hong, Ms Zhou Yuan and Mr Yos Virin from Nanyang Technological University (NTU).

Three students won the MTI book prize: Mr Joel Ng from SMU, Ms Christabelle Soh Ning En from NTU, and Mr Zhuang Kai Quan from NUS.

Each award comes with a $2,000 cash prize, sponsored by MTI.

Source: Straits Times, 14 Oct 2009