Singapore cut the upper end of its economic growth forecast for 2012 as a global slowdown from Europe to China weighs on the island’s expansion.
The Southeast Asian nation’s gross domestic product will probably rise 1.5 per cent to 2.5 per cent this year, Prime Minister Lee Hsien Loong said in a televised message Wednesday on the eve of the citystate’s National Day.
The government previously predicted growth of 1 per cent to 3 per cent. The economy grew 1.7 per cent in the first half, he said.
“We celebrate National Day amidst an unsettled world,” Mr Lee said. “Europe and the US face serious economic problems. Asia is doing better than other regions, but China and India are slowing down and tensions are simmering in the South China Sea.”
Policy makers across the world are girding for a deeper impact from Europe’s debt woes, with Asian central banks from China to South Korea and the Philippines cutting interest rates last month.
Singapore remains vulnerable to fluctuations in overseas orders for manufactured goods even as the government boosts financial services and tourism, and the central bank in July warned growth may be below 1 per cent should the world economy worsen significantly.