SINGAPOREAN Prime Minister Lee Hsien Loong has warned that the trade war between the US and China could impact the growth of the affluent city-state.
In his New Year’s message, Lee expressed that the trade tensions between the two major superpowers could force others to pick sides.
With Singapore being highly dependent on trade, Lee’s message reflected his government’s challenge of maintaining close ties with both Beijing and Washington.
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“These tensions will cause problems for the world, and make it harder for countries to be friends with both,” Lee said in a statement issued by the Prime Minister’s office.
Despite concerns of a cooling economy, Lee touted the Singaporean economy’s performance for 2018.
“Our economy grew steadily at 3.3% — close to 2017, and above our expectations,” he said, as quoted by Nikkei Asian Review.
However, he pointed out “major uncertainties in the global economy, with growing trade conflicts, nervous financial markets and signs of slowing growth.”
According to Reuters, Singapore has forecast GDP growth for 2018 to come in at between 3.0 percent and 3.5 percent versus a three-year high of 3.6 percent the previous year.
US President Donald Trump (L) shakes hands with Singapore’s Prime Minister Lee Hsien Loong (R) during his visit to The Istana, the official residence of the prime minister, in Singapore on June 11, 2018. Source: AFP
Lee reiterated the government’s forecast for GDP growth in 2019 to be between 1.5 percent and 3.5 percent.
Some economists noted while Singapore’s economic growth is expected to slow in 2019, the city-state could expand at a robust pace.
On its relationship with neighbouring countries, Singapore is facing a diplomatic row with its closest neighbour Malaysia on several issues, including maritime and airspace disputes and a decades-old water supply agreement.
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The issues between the two countries emerged after Malaysian Prime Minister Dr Mahathir Mohamad returned to power after defeating the long-ruling Barisan Nasional coalition led by Najib Razak.
Despite Malaysia’s claims, Lee insists the issues be handled through negotiations. Next week, both Malaysian and Singapore officials are expected to meet in the city-state to resolve the claims of the two countries.
“We will deal with all these matters calmly and constructively,” Lee said.
