Growth this year likely to hit lower end of forecast: Acting PM Lee

First created : 29 March 2003 1828 hrs (SST) 1028 hrs (GMT) Last modified : 29 March 2003 1828 hrs (SST) 1028 hrs (GMT) By Malcolm Scott

Acting Prime Minister Lee Hsien Loong on Saturday spoke of the war in Iraq, saying the US-led forces will undoubtedly prevail, but he also highlighted the downside risks to Singapore's economy if the war is protracted.

Speaking at a business event, Mr Lee said, "Now the optimistic view of the future is that there will be a swift and decisive war in Iraq, oil prices will fall, things will return to normal, growth will pick up in the second half. But there are downside risks because this is not a certain scenario."Advertisement He added, "The war may drag on longer than expected; it may take months instead of weeks. Oil prices may not fall quickly even after the war."

He said, "Previously people were worried about Venezuela; now there are riots in Nigeria, so that's another factor that will keep oil prices up, and there are long-term issues facing the US and European economies...In America because of over capacity and balance of payments issues, in Europe because of structural problems.

"Therefore we think 2003 is likely to be a difficult year for the global economy and also for Singapore. We've forecast 2 to 5 percent as a broad range but we don't think we'll hit 5 percent, it's going to be somewhere in the lower range, and we expect full recovery only next year."