Singapore trims growth forecast to up to 6 per cent for 2011

Aug 8, 2011, 12:47 GMT

Singapore - Singapore on Monday trimmed its growth forecast to between 5 and 6 per cent for 2011, cutting an earlier projection by one percentage point, as debt woes in the United States and Europe were fueling fears of a global economic crisis.

'Despite some risks on the horizon, we project steady growth,' Prime Minister Lee Hsien Loong said in a televised message on the eve of the city-state's National Day.

The government earlier said it expected Singapore's economy to expand between 5 and 7 per cent in 2011, after a record 14.5-per-cent growth in 2010.

Singapore's gross domestic product rose 4.9 percent in the first half of 2011 from a year earlier, Lee said.

His remarks came after the debt and bailout crises in the eurozone and the historic downgrading of the US creditworthiness since Friday sent shockwaves through international markets.

Lee said the global economic outlook was uncertain because major economies such as the US, Europe and Japan continued to face problems.

'These three key economies are struggling to find the decisive leadership they need to resolve their domestic challenges, he said. 'This will weigh them down and dampen global prospects.'

Lee said Europe's debt problems were far from being solved, despite the recent bailout of Greece by the EU, while the US economy remained sluggish.

'Japan has the added burden of earthquake and tsunami recovery,' said Lee.