OUTLOOK FOR 1990

There are some uncertainties in the outlook for 1990. The Singapore economy is sound, and well-poised to take advantage of the opportunities open to us. In the latest (1st quarter 1990) survey of business expectations, Singapore entrepreneurs, especially those in the financial sector, continue to be optimistic about business prospects for the 6 months ending June 1990.

However, much depends on the international outlook. World trade and output may be slightly slower than 1989. The majority view of economists is that a recession is not imminent in the United States. The economic impact of the strategic changes in Eastern Europe, and the impending formation of EC 1992 is still uncertain. The rapid opening up of Eastern Europe, and especially the swift moves towards reunification in Germany, offer new opportunities for increased trade and economic growth. However, the need for investment funds and the release of pent-up consumer demands in these countries will place heavy strains on the international capital markets and the international monetary system.

Barring these major uncertainties, the Ministry of Trade and Industry estimates that the Singapore economy will grow in 1990 at between 6 to 8%, above our long-term sustainable rate, but less quickly than in 1989.