Singapore’s economic growth held above 3 percent for a second year, Prime Minister Lee Hsien Loong said, calling on the nation to rally around a new team of leaders and ensure continuity as he prepares to step down.
Gross domestic product expanded 3.3 percent in 2018, Lee said in his New Year message on Monday. That matches the median estimate in a Bloomberg survey of 14 economists. Singapore is forecast to grow 1.5 percent to 3.5 percent next year, he said, citing "major uncertainties" in the global economy amid trade conflicts and nervous financial markets.
As one of the most export-reliant nations in Asia, Singapore’s growth prospects are closely tied to the outlook for the global economy and trade. Singapore is coping better than other countries where "veins of unhappiness" over stagnating wages and tougher living standards are leading to protests and drastic loss of support for moderate politicians, Lee said.
The premier defended the country’s model of governance as “quite exceptional,” and said it enabled Singapore to stand out in a highly-competitive world as it makes significant headway in leadership succession. The ruling People’s Action Party tapped Finance Minister Heng Swee Keat as Lee’s de facto successor in November, kicking off Singapore’s third leadership transition in its 53-year history.
“Singaporeans have a vital part to play in this succession,” Lee said in the e-mailed statement released by his office. “Singapore politics cannot afford to be riven and destabilized by the rivalries, contestations and factions so often seen elsewhere.”
Lee, 66, has signaled he intends to hand over the premiership by the time he turns 70 in 2022 -- a year after the country’s next general elections are due. An election in 2019 is “always possible,” with the country celebrating the 200th year of its modern founding, Lee said in November.
“With long-term policies in place and a strong team in charge, we have reason to be confident about our future,” Lee said. The government is working to improve healthcare, education, housing and public transport, he said.
Relations between the U.S. and China continue to cause concern, Lee said Monday. If countries are forced to choose sides, it will further divide the "open and connected global order" and hurt everyone, he said.
Authorities in Singapore have been fairly upbeat this year about the growth outlook despite rising U.S.-China trade tensions, though they expect the tariff wars to hit growth in the region. Lee typically gives the government’s first official estimate for full-year growth in his New Year’s message, and more-detailed GDP figures for the fourth quarter and 2018 will be released on Wednesday.
The Ministry of Trade and Industry had forecast an expansion of 3 percent to 3.5 percent for 2018. Weaker growth in 2019 could complicate the outlook for monetary policy. The nation’s central bank, the Monetary Authority of Singapore, tightened policy twice in 2018, and is due to release its next policy statement in April.
Beyond its shores, Singapore is tending to relations with its closest neighbors Indonesia and Malaysia, Lee said. With Malaysia, where issues on maritime boundaries, airspace and water prices have surfaced, Lee said the country would deal with all these matters “calmly and constructively,” upholding international commitments and the rule of law.