| The Singapore economy slowed down
in 1996 after 3 years of above-potential growth. After
3 boom years, the global electronics industry took some
corrections to shed its excessive inventory. The consequential
slower growth in regional countries also affected our
hub services like shipping and entrepot trade.
As a result, after a strong 11.5 per
cent growth in the first quarter of 1996, the economy
moderated to 7.6 per cent in the second quarter, fell
to 3.3 per cent in the third quarter, before rebounding
to 5.8 per cent in the last quarter. For the whole of
1996, we managed a 7.0 per cent growth.
This slowdown eased the pressures
of high growth but has not adversely affected our economic
fundamentals. Our labour market remained tight. Real
wages grew by 3.4 per cent, slightly lower than a year
ago. Inflation was also lower at 1.4 per cent compared
to 1.7 per cent in the previous year. Although productivity
growth declined to 0.7 per cent and unit labour cost
rose by 3.5 per cent, investors remained confident in
our sound economic fundamentals, committing a record
$8.1 billion in manufacturing investments in 1996, an
increase of 19 per cent over 1995. |
