Smokes rises out of chimneys from a Shell oil refinery on Pulau Bukom, 5 kilometers to the south of the main island of Singapore on Jan. 13, 2015. (AFP Photo/Roslan Rahman)
Singapore to Cut Investment Amid Uncertainty
BY :SHARON CHEN
FEBRUARY 02, 2015
Singapore will target lower levels of investment in the next few years, its economic development board said, as the island nation contends with tighter manpower policies and an uncertain global economic environment.
The government forecasts S$9 billion ($6.6 billion) to S$11 billion in fixed-asset investment commitments this year, and targets a similar range "in the coming years," chairman Beh Swan Gin said Monday. The upper end of that band would be the least since 2006, when the nation lured S$10.4 billion, according to the data.
"The situation in Europe is not something that we can predict with any certainty," Beh said. "The US is probably the sole bright spot" this year, he said, with analysts expecting "China's economic growth to continue to moderate downwards."
A Chinese manufacturing gauge declined last month, signaling the first contraction in more than two years, while the annual inflation rate in the euro area fell at the fastest pace since 2009. An economic restructuring in Singapore that includes slowing the inflow of cheap overseas labor is also hurting companies, as the government steps up efforts to lure investment into research and development and industries such as aerospace engineering.
The Southeast Asian nation attracted S$11.8 billion in fixed-asset investments last year, matching the sum in 2009, according to today's data. Europe made up 26 percent of the total, while the United States accounted for 15 percent and China contributed about 4 percent.
The investments targeted this year should help generate 13,000 to 14,000 skilled jobs and contribute S$11 billion to S$13 billion in value-add to gross domestic product, it said.
The forecast for 2015 investments "reflects our sharper focus on attracting projects that are in line with Singapore's stage of economic development, manpower policies and planned international commitments on carbon emissions," it said.