By Kenny Chee

THE Singapore economy is not expected to see another dip in the immediate future, and it is likely to continue stabilising, said Prime Minister Lee Hsien Loong yesterday.

But a dramatic recovery is not being seen, as Singapore's growth depends on the situation in developed countries, he said.

Speaking at a media conference ahead of the Asia-Pacific Economic Cooperation (Apec) Leaders' Week beginning this Sunday, he noted that recovery in developed countries was due to stimulus packages administered by their governments.

Though the global economy is picking up, these should not be withdrawn suddenly, he said.

"As governments withdraw these stimuli, you (need) to have self-sustaining growth to create prosperity so that you are actually spending what you are creating," he cautioned.

He also said that Americans need to save more and Asians need to spend more.

"How you balance the risks of withdrawing (the stimuli) too quickly and administering too much adrenaline, that's something to be discussed by the finance ministers and central banks, and calibrated as we go along," he said.

Citi economist for Singapore and Malaysia, Mr Kit Wei Zheng, said in a report lastmonth that "with export recovery likely gathering steam, it does not appear that a gradualist fiscal-exit strategy will have a huge impact on growth next year" for Asia.

He noted that countries like Singapore had begun phasing out its stimulus packages. For example, the Jobs Credit scheme, which subsidises citizens' wages, will be withdrawn next June.

Mr Kit said: "This gradual withdrawal of excessive stimulus is justified because it is no longer needed given the swift recovery in Singapore's case."

kennyc@sph.com.sg

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