ASEAN KEY DESTINATIONS
Singapore: Economic slowdown to last several quarter
Singapore will see an economic slowdown that could last several quarters as the subprime mortgage meltdown has evolved into a global economic crisis, Reuters quoted Finance Minister Tharman Shanmugaratnam as saying in remarks published on Monday.
"It is no longer just a financial crisis," the pro-government Straits Times newspaper quoted him as telling party workers." It is now an economic crisis."
He said it could take a year or two before the world emerges from the crisis.
Tharman said the planned $700 billion U.S bailout package is a step forward, but warned it will not fully solve the shortage of capital facing banks.
But he said Singapore will be able to ride out the crisis because of its strong economic fundamentals such as low unemployment, a diversified economy and a strong fiscal position.
"We'll be able to take the necessary actions if the situation turns much worse," he said, according to the newspaper.
Tharman also repeated a warning made by the trade minister that Singapore's economic growth could dip below 4 percent this year.
Economists have warned that Singapore's economy may slide into a technical recession in the third quarter -- two quarters of economic contraction -- as the credit crunch depresses demands for Singapore's exports in the key US and European markets.
Tharman said Singapore's banking system is safe amid strict central bank regulation and there is no need to increase the minimum guarantee that insures deposits of up to S$20,000 ($13,800).
Germany offered a blanket bank deposit guarantee on Sunday in a bid to contain the spreading credit crisis as officials clinched deals to rescue Germany's Hypo Real Estate and recapitalize two other European banks.
Austria and Denmark quickly followed suit with the same kind of blanket deposit guarantee first offered by Ireland last week to shore up consumer confidence in the banking system.