Times are tough and they will stay that way for a while, warned Deputy Prime Minister Tharman Shanmugaratnam yesterday.
"This year we had some growth in the first half of the year. I think the second half of the year will be weaker, so we will probably end up somewhere at the lower end of the 1 to 2 per cent range," he added.
Mr Tharman was responding to a question from The Straits Times on whether a survey of professional forecasters that tipped the Singapore economy to grow 1.8 per cent this year and next might be too pessimistic.
He said "no", adding: "Structurally, we are now in the new mode of growth. We can't keep growing by increasing manpower. We have to get productivity up."
Some stimulus will come from government infrastructure projects, noted Mr Tharman, who is also Coordinating Minister for Economic and Social Policies. But Singaporeans must be prepared for a "new normal" of 2 per cent to 3 per cent annual growth hereon, and below 2 per cent growth for a couple of years, he said. Unemployment will likely increase, he added.
Mr Tharman was speaking on the sidelines of the official opening of an expanded research and production facility at transport engineering firm Wong Fong Industries in Joo Koon Circle.
Mr Tharman cited Wong Fong as an example of investing in new capabilities in the midst of a tough climate.
Apart from companies retooling in tough times to build competitiveness for the upturn, Mr Tharman said: "We have to do the utmost to make sure that the increased unemployment doesn't become structural... That means we've got to help everyone who's displaced from a job to get back in as soon as possible."
The task is to match people to jobs and reduce the mismatches in skills between what people have and what the jobs require, Mr Tharman added.
He noted that when the economy is weak, there tends to be more job seekers than vacancies. But in Singapore, the numbers are about the same, with job vacancies at 49,400 in June and around 50,000 job seekers.
This presents an opportunity for recruitment firms to borrow from working models in Australia and Britain and focus on more active matching. "We're going to expand our use of private placement providers, and give them the incentive to actively match people to jobs," Mr Tharman said.
This article was first published on September 29, 2016.
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