Ø    While the whole year’s growth was healthy, growth momentum was in fact mostly flat since the second quarter of 2011.

Ø    For the manufacturing sector, the biomedical cluster provided a significant boost to growth. Many of the other manufacturing clusters saw relatively weaker growth or output contraction.

Ø    Key export-oriented sectors such as electronics and wholesale trade were affected by sluggish external demand and slowing global trade flows.

Ø    In the finance and business services sectors, sentiment-sensitive activities such as fund management, stock trading and real estate transactions moderated due to heightened economic uncertainties.

Ø    On the US front, the labour market and consumer spending have shown some signs of improvement, but we think it is too early to conclude that there will be an impending strong economic rebound. The strength of the recovery will be restrained by public spending cuts as well as continuing weakness in the housing market.

Ø    The Eurozone is undergoing fiscal consolidation. European banks have tightened lending to businesses and households. These factors will weigh on private demand growth.

Ø    Growth in Asia is expected to moderate with the easing in external demand. In China, growth will be further dampened by a pull-back in fixed asset investment as property market sentiments cool.


For Singapore, near term indicators on a sectoral basis do not point to an imminent rebound in the Singapore economy.

Ø    Inventory adjustment in the global IT industry will continue to weigh on the electronics cluster. This will have a negative spillover effect on the precision engineering cluster.

Ø    The finance services sector could be adversely affected by the uncertainty over the Eurozone sovereign debt crisis, through its impact on business investment decisions and correspondingly financial intermediation activities.

Ø    We expect the tourism-related services sectors could provide some modest support to growth with rising visitor inflows from the region.

Based on all these factors and the ongoing weakness in the external environment, MTI is maintaining the 2012 growth forecast at between 1 to 3 per cent.

Now I have to caution here that this forecast does not factor in key downside risks, which include: 

Ø    A disorderly sovereign debt default in the Eurozone;  and

Ø    An oil price shock arising from escalating geopolitical tensions in the Middle East.

Should any of these risks materialise, Singapore’s growth could come in lower than expected.

Together with my panel members, I would now take your questions.