BUDGET DEFICIT FOR FINANCIAL YEAR 2001

Mr Tay Beng Chuan asked the Minister for Finance if his Ministry can provide for a budget deficit for FY 2001 in order to stimulate domestic demand, given the many indications of a slowdown in the US economy and political uncertainty in the region which will adversely affect the Singapore economy.

Dr Richard Hu Tsu Tau: Our economy is expected to grow at 5 to 7% in 2001, well below the exceptional growth rate of 10.1% in 2000. This forecast takes into account a slowdown in the US economy and continued uncertainties in the region. Adequate funds should therefore be available to finance all desirable expenditures, and a sharing of some budget surpluses may even be possible.

However, if a hard landing of the US economy triggers off a worldwide recession affecting the region, the Government has ample resources to support any downturn in our economy, as we did in the 1997/1998 recession.