Published April 10, 2009

PM signals downgrade for economic outlook

But retrenchment and jobless numbers are looking better than expected

By TEH SHI NING

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(SINGAPORE) Singapore's economic forecast will have to be revised downwards as export levels remain depressed in this global recession, Prime Minister Lee Hsien Loong said yesterday.

But retrenchment and unemployment numbers are looking better than expected.

Speaking to reporters after his visit to NTUC's Employment and Employability Institute (e2i), PM Lee said that the current forecast of a 2 to 5 per cent contraction will be downgraded again when the Ministry of Trade and Industry releases Q1 GDP figures next Tuesday, but he does not expect it to fall into double-digits.

PM Lee also said that it remains uncertain when America, and the global economy, would begin to recover.

There is good news on the jobs front though. The number of layoffs, likely to exceed 10,000 for the first quarter, is lower than expected.

'We expected a very big wave of retrenchments, particularly after the Chinese New Year,' he said. 'But so far, the retrenchment and unemployment numbers have been better than we had feared. And I think the efforts which we've put in must have something to do with this.'

These include the Jobs Credit scheme and Spur (Skills Programme for Upgrading and Resilience), which provide grants and subsidies to help employers save jobs and workers to upgrade their skills.

It was to see these schemes in action, that he visited e2i to observe job seekers at training workshops yesterday, PM Lee said. 'I'm happy to see that the system is running well . . . and that people here are in good spirits, making the effort, willing to go out of their comfort zone to learn something, try something different, and find a job in this environment.'

Labour chief Lim Swee Say, who visited e2i with PM Lee, said that at the four-week-long peak of the first wave, 800 to 900 workers in the unionised sector were being retrenched each week. Retrenchments have since stabilised at about 200 to 300 a week, after job-saving measures kicked in.

But Mr Lim warned against assuming that it would stay that way, adding that a second wave of retrenchment will come. 'We have to double efforts to help retrenched workers gain employment. Our concern is that the unemployment rate may rise, not because we don't have enough jobs, but due to a mismatch between jobs supply and skills supply.'

When asked if additional off-Budget measures are on the cards as May Day approaches, PM Lee said that it is premature to speak of extra measures as those under the $20.5 billion Resilience Package are being rolled out and are showing results.