View Full Version : Severe asset inflation a risk: Economist
http://www.straitstimes.com/Money/Story/STIStory_415594.html
August 12, 2009 Wednesday
Severe asset inflation a risk: Economist
By Melissa Tan
SINGAPORE risks 'severe asset inflation' during the economic recovery, a local economist has warned.
But this danger can be averted if the Government acts now to control the prices of HDB flats, said Mr Paul Yip, Nanyang Technological University (NTU) associate professor of economics.
Asset inflation - meaning a rise in price of assets such as stocks and property - is a possible consequence of the United States' current expansionary fiscal policy, Professor Yip said yesterday.
He was speaking at an NTU symposium - on exchange rate systems and Asian macroeconomic policies - which brought together 11 macroeconomists from institutions such as Stanford University and Delhi School of Economics.
'Many people say that the property market is rebounding, but I don't think so; we are still bottoming. Recovery will be slow ... and a few years later we might have severe asset inflation, much more than the rise today,' Prof Yip said.
'So if you are a stock investor or property investor, it's very easy. Just hold your stock and shares for another three or five years - the price will climb to be much higher. But if you lose money, don't blame me,' he quipped.
Prof Yip noted that the US government has lowered interest rates and expanded its money supply in a bid to avoid a repeat of the Great Depression.
But post-recession, the government may fail to shrink the money base back to pre-downturn levels, he said. In that case, excess US dollars would flood the market.
'For Singapore, there may be an inflow of money from the US, increasing the money base and therefore the money supply... When the recovery comes, there will be wage inflation and consumer price index inflation, and this will fuel asset inflation,' he told The Straits Times.
'Rents will rise and then people will be able to charge even higher rents, causing a vicious circle,' Prof Yip said.
'To curb asset inflation early, the Government can supply more HDB flats and prevent HDB prices from going up with private property prices - among other things. The price will become unaffordable because we have the wrong market structure; developers are trying to maximise profit by selling in batches and using price discrimination.'
instead of preventing the property bubble from growing..
the article is helping to put more oil into the property market...
So now everyone will be rushing to buy properties since professor say next 5 yrs properties will definitely rise in value.
I will stay out of the property market and missed the bull run instead.
Buffett says Be greedy when others are fearful.. and be fearful when others are greedy.
instead of preventing the property bubble from growing..
the article is helping to put more oil into the property market...
So now everyone will be rushing to buy properties since professor say next 5 yrs properties will definitely rise in value.
I will stay out of the property market and missed the bull run instead.
Buffett says Be greedy when others are fearful.. and be fearful when others are greedy.
Not everyone buys bcos of greed. Some buy now exactly bcos they are fearful of not able to afford it years later. Ultimately, the BTO/DBSS schemes are favoring property inflation isn't it?
There seem to be serious shortage of supply of HDB flats (demand from new PRs and newly weds), which in turn fuel the upgrading of current HDB owners to private properties. This upgrading will not stop until HDB flats increase supply and prices drop. However, there is no way HDB flats prices going to drop when there is shortage of supply and even if to build now, it will take at least 2.5 years to allocate land, design, build & complete the flats and hence prices are expected to escalate for at least another 2.5 years even if they flood the supply NOW.
Not everyone buys bcos of greed. Some buy now exactly bcos they are fearful of not able to afford it years later. Ultimately, the BTO/DBSS schemes are favoring property inflation isn't it?
There seem to be serious shortage of supply of HDB flats (demand from new PRs and newly weds), which in turn fuel the upgrading of current HDB owners to private properties. This upgrading will not stop until HDB flats increase supply and prices drop. However, there is no way HDB flats prices going to drop when there is shortage of supply and even if to build now, it will take at least 2.5 years to allocate land, design, build & complete the flats and hence prices are expected to escalate for at least another 2.5 years even if they flood the supply NOW.
Actually it is quite a balancing act that the government has to hold on to.
Too many HDBs and ppl will complain too many.
Too little HDBs and ppl will complain too little.
The tone of the above article is totally wrong.
Either the reporter missed his point, or the economist was not clear in presenting his.
Let me attempt to re-write it.
Severe asset inflation a joy!: Economist
SINGAPORE will enjoy 'severe asset inflation' during the economic recovery, a local economist has enthused.
But this joy can be spoilt if the Government acts now to control the prices of HDB flats.
Asset inflation - meaning a rise in price of assets such as stocks and property - is a possible consequence of the United States' current expansionary fiscal policy.
'Many people say that the property market is rebounding, but you ain't seen nothing yet! We are still in the early days ... and a few years later we might have severe asset inflation, much more than the rise today,'
'So if you are a stock investor or property investor, it's very easy. Just hold your stock and shares for another three or five years - the price will climb to be much higher. But if you lose money, don't blame me,' he quipped.
The only word I do not need to correct is the word "quipped". I think that sets the correct tone for the whole article.
You will notice that he said that the bottom has not set in and will take a while before the rise.... property will correct first....
After that.... property is within reach (since corrected... even fire sales - my views).
Next...If there's too much US $ coming to Singapore....
Then property prices will be inflated... it will take 3 to 5 years in his views.
So if you do not have a case of too much US $ coming to Singapore... it will NOT be as stated. Read it well.
You will notice that he said that the bottom has not set in and will take a while before the rise.... property will correct first....
After that.... property is within reach (since corrected... even fire sales - my views).
Next...If there's too much US $ coming to Singapore....
Then property prices will be inflated... it will take 3 to 5 years in his views.
So if you do not have a case of too much US $ coming to Singapore... it will NOT be as stated. Read it well.
Aiyah, we are still trying to guess the 'real' message of this article.
I think it was meant to be ambiguous.
So that they can say they are right when things happen or don't happen.
Correct....
There are some assumptions made... it all depends and it can happen both ways. But it do give them impression that it is more likely to happen. Simply by virtue of inflation. No need to bother about it too much, it is only a hypothesis and not a fact.
Scary artcle "severe asset inflation"
But to be honest it is true. Int rates are so bloody low that it makes little sense not to buy assets now at the "
bottom"
Allthepies
12-08-09, 21:36
its the government intention to jerk up the HDB prices. all their policies support this.
1) Restricting supply of HDB flats especially in the west.
2) Using resale price to bench mark the price of new HDB. (affordability is no longer their concerns.)
3) BTO/DBSS
so they are unlikely to want to burst the bubble :)
Regulators
12-08-09, 21:55
so what the guy is saying is that property is a good hedge against monetary inflation in the next 5 years. :eek:
so what the guy is saying is that property is a good hedge against monetary inflation in the next 5 years. :eek:
That is so obvious, you dont need a professor to tell u that right?
When Lehmen brother collapse, credit freezed and velocity of money almost come to a standstill. We are now seeing an improvement in the velocity of money as credit has been restored back into the system.
However, many people have underestimate the consequences of the massive injection of funds by central banks. The combination of improving velocity of money, supply of money and low interest rate will lead to inflation worst than what we see in 2007.
This is an opportune time for people to lock into an asset at a low price and enter a leverage position (borrowing) to hedge against inflation. But of course need to know when to get out before bubble burst.
From Wikipedia, the free encyclopedia
The velocity of money is the average frequency (http://en.wikipedia.org/wiki/Frequency) with which a unit of money (http://en.wikipedia.org/wiki/Money) is spent in a specific period of time (http://en.wikipedia.org/wiki/Time). Velocity associates the amount of economic activity associated with a given money supply (http://en.wikipedia.org/wiki/Money_supply). When the period is understood, the velocity may be present as a pure number; otherwise it should be given as a pure number over time. In the equation of exchange (http://en.wikipedia.org/wiki/Equation_of_exchange), velocity of money is one of the key variables determining inflation (http://en.wikipedia.org/wiki/Inflation).
Seriously.. i dun get what he is trying to say :(
Allthepies
13-08-09, 12:41
so now what, buy or don't buy? :)
[quote=Allthepies]so now what, buy or don't buy? :)[/quo
te]
BUY those undervalued older properties,not those new launch overpriced.:doh:
[quote=Allthepies]so now what, buy or don't buy? :)[/quo
te]
BUY those undervalued older properties,not those new launch overpriced.:doh:
Do your homework. Some old properties still present good values. However, sellers expectation are increasing each day (as long as the market is stable/up and no major shocks). Buy within your means, even if there is a correction, you can still hold on to your assets and not force to liquidate it at a loss.
[quote=jwong71]
Do your homework. Some old properties still present good values. However, sellers expectation are increasing each day (as long as the market is stable/up and no major shocks). Buy within your means, even if there is a correction, you can still hold on to your assets and not force to liquidate it at a loss.
Good advice.
Resale properties asking price can exceed new launches. That's the problem today. However there seems to be a massive difference between asking/advertised price and what the URA caveats are showing. Has anyone experienced how owners will respond if you offer 20% or 30% lower than asking or closer to the caveats?
[quote=AAA]
Good advice.
Resale properties asking price can exceed new launches. That's the problem today. However there seems to be a massive difference between asking/advertised price and what the URA caveats are showing. Has anyone experienced how owners will respond if you offer 20% or 30% lower than asking or closer to the caveats?
Back when sales was the bleakest and lower than 500 units a month, I tried offering 20% or 30% lower than asking. Agent was very kind to not make me feel like an idiot trying his luck, he reverted my offer to the buyer. Needless to say my offer failed miserabily.
Tried again in April May 2009. This time offered close to caveat prices, again failed miserabily.
Asking 20% or 30% lower is only a stretegy u can use in a falling property market. Even then, as my experience showed, u have to thank your lucky stars if the owner (a desperate seller) decides to sell to u.
[quote=AAA]
Good advice.
Resale properties asking price can exceed new launches. That's the problem today. However there seems to be a massive difference between asking/advertised price and what the URA caveats are showing. Has anyone experienced how owners will respond if you offer 20% or 30% lower than asking or closer to the caveats?
Maybe u can try those desperate fire sales. Need not apply to those who got the holding power. Smtimes the owners see some opportunity in recession, just wan to free out their cash from their properties. Doesnt mean that they are desperate to sell.
I had frzs trying to offer below bank valuation, when is had alrdy been 50k cheaper from transacted prices.
They will chase the boat forever even if is CHeap or Expensive.
Caveats- take some months to be updated of the latest uped prices.
- depends the unit facing conditions. etc ...
http://forums.condosingapore.com/showthread.php?t=6876
As shown above caveats having the non-accurate transcated prices
Just try... no harm trying... but as you are now in a chasing mode.... not easy to get any owner who would want to sell you below market rate.. Have to work harder and go through the classifieds and call the owner yourself. It's now a seller's market.
Sometimes the offer never get past the agents... beware and be aware.
If you can wait... wait till the tides are turned... to a falling market... or buyer's market. Otherwise... just watch from the sidelines. If your hands are itchy... don't blame anyone when you get burnt.
Just try... no harm trying... but as you are now in a chasing mode.... not easy to get any owner who would want to sell you below market rate.. Have to work harder and go through the classifieds and call the owner yourself. It's now a seller's market.
Sometimes the offer never get past the agents... beware and be aware.
If you can wait... wait till the tides are turned... to a falling market... or buyer's market. Otherwise... just watch from the sidelines. If your hands are itchy... don't blame anyone when you get burnt.
It may surged up to 50% and corrected to a 10-20% low. So is overall of surged of 30%.. but if hoping for the correction,back to the bottom prices. It likely come or never come.
Buy on guts and within budget
the offer dont pass the agents. haha
[quote=AAA]
Good advice.
Resale properties asking price can exceed new launches. That's the problem today. However there seems to be a massive difference between asking/advertised price and what the URA caveats are showing. Has anyone experienced how owners will respond if you offer 20% or 30% lower than asking or closer to the caveats?
the offer dont pass the agents. haha
You are right.
There is no point in offering 20% to 30% below market price, because the agent will know that it is not a serious offer.
At any point in time, there is a "market price". Whether the market shoots up 30% or crashes down 30%, there will be a "market price".
A serious property buyer will offer around the market price.
If the owner is really willing to accept 30% below market, the property agents themselves would grab the property, or they would arrange their friends to buy it, and it won't be your turn.
If a below market price property is available, they will probably try to buy it and quite likely to try to sell it to you at the Market Price. Flipping.
So if you want to have good lobangs... be a agent, banker, auction buyer etc..
Beware... agents may be liable and risk being sued by owners. There's a recent case on this in the courts and agents lost the case. Although this being the case.. it is going to be harder to prove in future.
Don't believe you can get 20% to 30% lower than asking. 10% lower may be in a falling market but not a rising market like now. Current transactions most likely will be at about asking price. I recently seen 2 units in an estate being sold lower than last transacted price and yet these units are on much higher floor and 1 unit is the best stack in the estate as compared to the transacted unit being on lower floor and poorer facing. People may just point to the transacted price and say that prices have dropped. If they know what is behind then they will know that these 2 units are private transactions owned by the same owner and not listed publicly for sale. There is no way anybody out there can buy at such price.
[quote=andy]
Back when sales was the bleakest and lower than 500 units a month, I tried offering 20% or 30% lower than asking. Agent was very kind to not make me feel like an idiot trying his luck, he reverted my offer to the buyer. Needless to say my offer failed miserabily.
Tried again in April May 2009. This time offered close to caveat prices, again failed miserabily.
Asking 20% or 30% lower is only a stretegy u can use in a falling property market. Even then, as my experience showed, u have to thank your lucky stars if the owner (a desperate seller) decides to sell to u.
[quote=teddybear]Don't believe you can get 20% to 30% lower than asking. 10% lower may be in a falling market but not a rising market like now. Current transactions most likely will be at about asking price. I recently seen 2 units in an estate being sold lower than last transacted price and yet these units are on much higher floor and 1 unit is the best stack in the estate as compared to the transacted unit being on lower floor and poorer facing. People may just point to the transacted price and say that prices have dropped. If they know what is behind then they will know that these 2 units are private transactions owned by the same owner and not listed publicly for sale. There is no way anybody out there can buy at such price.
Care to share which development has these kind of price manipulators? :mad:
Don't forget that some deals are not meant to be public and not offered to be public also. Father to son deal etc.
Also note that there will be some deals which reflect inflated prices or deflated prices and is not the true transacted value. This practice would run foul of the law and it is for the law enforcers to proof their case. You do have such cases in the news from time to time.
Geylang OKT
15-08-09, 08:31
Buy!
Property is an excellent hedge against inflation!:D
Buy!
Property is an excellent hedge against inflation!:D
So is oil. Buy oil related commodity ETF. :D
if there r hot möney, it will go to us mkt 1st. For us0.5m u get a pigeon hole in sg at historic peak price vs a nice hse in california at 50pct of peak. No rocket science, jus common sense.
I won't call this price manipulators. It could be father to son or family-related transaction and they are probably trying to minimize stamp duty that they need to pay but yet without putting too low a transacted price otherwise it is too obvious and IRAS will come after them.
[quote=teddybear]Don't believe you can get 20% to 30% lower than asking. 10% lower may be in a falling market but not a rising market like now. Current transactions most likely will be at about asking price. I recently seen 2 units in an estate being sold lower than last transacted price and yet these units are on much higher floor and 1 unit is the best stack in the estate as compared to the transacted unit being on lower floor and poorer facing. People may just point to the transacted price and say that prices have dropped. If they know what is behind then they will know that these 2 units are private transactions owned by the same owner and not listed publicly for sale. There is no way anybody out there can buy at such price.
Care to share which development has these kind of price manipulators? :mad:
California? May be 1 night you get buried you also don't know why (with earth shaking and the house tumbling down). This will never happen in Singapore. - new york? Florida? Nevada? Choices aplenty. Jus bcos u r vested doesnt mean sg is the best. Sg got no risk? Rem we r surrounded by ppl that r very diff fm majority of singaporean.
if there r hot möney, it will go to us mkt 1st. For us0.5m u get a pigeon hole in sg at historic peak price vs a nice hse in california at 50pct of peak. No rocket science, jus common sense.
The concept of "value" cannot be evaluated using either "rocket science" or "common sense".
Once everyone else can afford to stay in such "nice houses", then these house are no longer "nice".
Choices aplenty yes, but which one offer absolute safety and good education for the rich & their offsprings? There are so many choices for Jim Rogers but he choose to settle in Singapore. There are also so many choices for Jet Li but he also choose to buy a bungalow and settle his family in Singapore. There are many many other such cases. What do they tell us? They are not bothered by those surrounding us being different people, but they are more bothered with the earth quakes, typoons, natural disasters, and some mad men carrying gun and go happy-merry shooting everyone that they see in other countries.
- new york? Florida? Nevada? Choices aplenty. Jus bcos u r vested doesnt mean sg is the best. Sg got no risk? Rem we r surrounded by ppl that r very diff fm majority of singaporean.
Not appropriate for me to name the condo exactly, but hint hint (this condo is near United Square).
We can't say they are price manipulators because they are just involved in the 1 or 2 transactions anyway, but it may affect somewhat the valuation in the estate since valuers just look at past transacted prices. Because of this, the other open market transacted prices become depressed as well. So such condo units are quite a bargain now, vs Viva of >$1450 psf-$1700 psf. Mind you, if anybody can accept Viva, then this condo is actually more conveniently located than Viva and high floors have better view than any unit in Viva (Viva will ultimately be all blocked with no far-away view once those new condos around it start coming up one by one).
[quote=teddybear]Don't believe you can get 20% to 30% lower than asking. 10% lower may be in a falling market but not a rising market like now. Current transactions most likely will be at about asking price. I recently seen 2 units in an estate being sold lower than last transacted price and yet these units are on much higher floor and 1 unit is the best stack in the estate as compared to the transacted unit being on lower floor and poorer facing. People may just point to the transacted price and say that prices have dropped. If they know what is behind then they will know that these 2 units are private transactions owned by the same owner and not listed publicly for sale. There is no way anybody out there can buy at such price.
Care to share which development has these kind of price manipulators? :mad:
Choices aplenty yes, but which one offer absolute safety and good education for the rich & their offsprings? There are so many choices for Jim Rogers but he choose to settle in Singapore. There are also so many choices for Jet Li but he also choose to buy a bungalow and settle his family in Singapore. There are many many other such cases. What do they tell us? They are not bothered by those surrounding us being different people, but they are more bothered with the earth quakes, typoons, natural disasters, and some mad men carrying gun and go happy-merry shooting everyone that they see in other countries.
Safety is one, another consideration of theirs is Singapore offers an environment to train bi-lingual (English + Mandarin) talents e.g. you can speak Mandarin to mainland Chinese, Malaysians and Taiwanese and English to the rest ...
Not appropriate for me to name the condo exactly, but hint hint (this condo is near United Square).
We can't say they are price manipulators because they are just involved in the 1 or 2 transactions anyway, but it may affect somewhat the valuation in the estate since valuers just look at past transacted prices. Because of this, the other open market transacted prices become depressed as well. So such condo units are quite a bargain now, vs Viva of >$1450 psf-$1700 psf. Mind you, if anybody can accept Viva, then this condo is actually more conveniently located than Viva and high floors have better view than any unit in Viva (Viva will ultimately be all blocked with no far-away view once those new condos around it start coming up one by one).
Not sure if I agree that Viva will ultimately be blocked since there is only thomson road on right and thomson park playground in front of it. Viva will block PI for sure. These only new condos coming up are Lucida behind suffolk walk, Lincoln Suites next to USQ. Very surprised Lucida dropped from a peak of $1700 to $1200. But then again this is next to CTE;-)
If you look very carefully, Viva is designed such that the south facing facade overseeing Istana is solid wall (no view). Those facing Thomson Road must be above probably 20th level to have some view of Kallang Basin (but further to the left will be totally blocked by Strata, Thomson Euro-Asia, and Novena Square). However, there is still an empty plot of land in front of Viva (belonging to FEO) which will ultimately have a new condo of same height as Viva coming up. So, ultimately, either the view is totally blocked or only very small pocket of far-away view due to gap between the buildings (which is even worse because bad fengshui).
Not sure if I agree that Viva will ultimately be blocked since there is only thomson road on right and thomson park playground in front of it. Viva will block PI for sure. These only new condos coming up are Lucida behind suffolk walk, Lincoln Suites next to USQ. Very surprised Lucida dropped from a peak of $1700 to $1200. But then again this is next to CTE;-)
[quote=teddybear]Not appropriate for me to name the condo exactly, but hint hint (this condo is near United Square).
We can't say they are price manipulators because they are just involved in the 1 or 2 transactions anyway, but it may affect somewhat the valuation in the estate since valuers just look at past transacted prices. Because of this, the other open market transacted prices become depressed as well. So such condo units are quite a bargain now, vs Viva of >$1450 psf-$1700 psf. Mind you, if anybody can accept Viva, then this condo is actually more conveniently located than Viva and high floors have better view than any unit in Viva (Viva will ultimately be all blocked with no far-away view once those new condos around it start coming up one by one).
People want to offload then do private deal even for 1 or 2 transactions. It affects valuation, isn't that a form of manipultation? Not complaining, and am not surprised cos I know it is happening even for new launches and have seen ura transactions at ridiculously high or low prices.
Just want to know the happenings on the ground. Thanks, I will go check out the condo near United Square!:D
Safety is one, another consideration of theirs is Singapore offers an environment to train bi-lingual (English + Mandarin) talents e.g. you can speak Mandarin to mainland Chinese, Malaysians and Taiwanese and English to the rest ...
I am quite impressed by jet li and folks in town..
but also we are surrounded by a sea of politcally unstable countries, population 100x times of singapore, of different culture, eyeing Singapore like a hungry wolf... rem "red dot" from habibie and war threats from mahathir? same things may happen again.. it's rosy now all is happy, but things can turn ugly quickly... and just to be aware of the risks & also there are other opportunities elsewhere too..
Those the like of Jet Li, Jim Rogers etc have many advisers to advice them and they still deemed Singapore good enough, so you think Singapore no good? No problem with that for us, since you can emigrate to other countries right if you think Singapore not good enough. We are aware of the risks, but the risks elsewhere is deemed to be higher than in Singapore (vs the like of even US).
I am quite impressed by jet li and folks in town..
but also we are surrounded by a sea of politcally unstable countries, population 100x times of singapore, of different culture, eyeing Singapore like a hungry wolf... rem "red dot" from habibie and war threats from mahathir? same things may happen again.. it's rosy now all is happy, but things can turn ugly quickly... and just to be aware of the risks & also there are other opportunities elsewhere too..
if there r hot möney, it will go to us mkt 1st. For us0.5m u get a pigeon hole in sg at historic peak price vs a nice hse in california at 50pct of peak. No rocket science, jus common sense.
The concept of "value" cannot be evaluated using either "rocket science" or "common sense".
Once everyone else can afford to stay in such "nice houses", then these house are no longer "nice".
... but but but ... we do need rocket science to understand why Jet Li, who is based in Hollywood for quite a while, did not choose to settle down in California.
Or is that common sense that make Jet Li came here?
I wonder.
proud owner
29-10-09, 23:17
... but but but ... we do need rocket science to understand why Jet Li, who is based in Hollywood for quite a while, did not choose to settle down in California.
Or is that common sense that make Jet Li came here?
I wonder.
for a star studded place like USA california .. who is Jet Li ?
but star hungry singapore will take any star ..bright or dim , up and coming, or sunset boulevard old hack ...
which up and coming star wants to live here ???
every wonder why Air Supply..old man band ..still come to singapore almost every other years ?
cos we are a bunch of suckers ... still worship them
http://www.reuters.com/resources/images/logo_reuters_media_us.gif
China sticks to loose policy
Reuters
Beijing, China
Friday, 30 October 2009
China will stick to an appropriately loose monetary policy, central bank governor Zhou Xiaochuan said on Friday.
Mr Zhou was speaking in Shenzhen at the launch of China's ChiNext stock market, a long-awaited Nasdaq-style second board.
His remarks were relayed by several Chinese news portals.
The State Council, China's cabinet, earlier this month reaffirmed China's moderately accommodative monetary stance and active fiscal policy even though it said the economy was now on a more solid footing.
Scary artcle "severe asset inflation"
But to be honest it is true. Int rates are so bloody low that it makes little sense not to buy assets now at the "bottom"
With all these governments continuing with their "loose" monetary policies, how can we not have "severe asset inflation"?
http://www.blogcdn.com/www.tvsquad.com/media/2006/10/cnbcbc.jpg
World Not Headed for Double-Dip: Singapore Leader
CNBC
Friday, 6 November 2009, 10:52 AM CCT
http://media.cnbc.com/j/CNBC/Sections/News_And_Analysis/_News/__EDIT%20Singapore/pmlee.standard.jpg
Singapore PM: APEC's Agenda is Economic Growth
This year APEC is more focused on economics, growth and free trade rather than counter terrorism and natural disasters, says Singapore's Prime Minister, Lee Hsien Loong, speaking to CNBC's Martin Soong.
The world economy is not headed for a double-dip recession, according to Singapore Prime Minister Lee Hsien Loong, but he does not expect a dramatic recovery.
In an interview with CNBC, Mr. Lee said that while the economic conditions globally have stabilized, more needs to be done to stimulate growth.
"US consumers have to save more and spend less," Mr. Lee said, "And the U.S. government also has to save more and spend less which I think is going to very difficult to do. And that is a macro adjustment which is necessary."
"At the same time, on the Asian side, economies like China have to stimulate their domestic demand," Mr. Lee added.
Prime Minister Lee said the 3.5% third-quarter GDP growth rate logged by the U.S. economy is a decent figure, but the key challenge will be whether the world's biggest economy can sustain the growth.
"The question is whether it can be sustain beyond the government stimulus, because (when) you've pumped so much money in, it is bound to show up somewhere in the GDP numbers," Mr. Lee said. "But beyond that, can you have self sustaining prosperity?"
Mr. Lee said that Singapore's exports - a key driver of the country's economy - have bounced back, even the comeback is not spectacular.
"It (export sector) depends a lot on the U.S., although we trade a lot with China, the ultimate market is really the United States," Mr. Lee said.
Singapore, which will host next week's APEC summit, is trying to push forward the free trade agenda, believing open markets are a win-win situation for all.
Prime Minister Lee said the talks will focus on measures to stimulate further recovery in the global economy as well as Asia-Pacific's role in boosting trade.
"Asia Pacific is a major part of the world economy. It has half the GDP of the world and 10 of the G20 members are APEC members. And if we can work together to sustain growth in the region, which is the theme of the APEC conference this year, then I think it makes a big difference to the world economy," Mr. Lee said.
Powered by vBulletin® Version 4.2.2 Copyright © 2024 vBulletin Solutions, Inc. All rights reserved.