U.S. financial turmoil creates new uncertainties for Singapore economy

SINGAPORE, Sept. 16 (Xinhua) -- The collapse of Lehman Brothers, among other bad news in the U.S. financial industry, has created new uncertainties for Singapore's economy, Singapore's Trade and Industry Minister Lim Hng Kiang was quoted by local media on Tuesday.
Lim told Parliament that his ministry is closely monitoring the impact of these new developments on the city-state's economic growth, local radio 938LIVE reported.
He was referring to news of Lehman Brothers' filing for bankruptcy protection, the sale of Merrill Lynch to Bank Of America, and AIG being thrown a 20 billion US dollar lifeline by New York authorities.
Lim said Singapore's current growth forecast does take into account developments such as a fall in oil and food prices and easing inflation.
The Singapore government last month revised downwards economic growth forecast to 4-5 percent from 5-6 percent for this year.
"This moderation in global prices has had a positive impact on our domestic prices. As a result, the goods and serves tax (GST) increase last year has also started to wear off. As a result, Singapore's headline inflation rate has started to ease. We expect to see a gradual easing of inflationary pressures in the second half of the year. For the whole year, we expect inflation to average 6 to 7 percent," he was quoted as saying.
He also pointed out the current forecast also takes into account that some of Singapore's export-oriented industries have been affected by the slower external growth, and this will dampen Singapore's gross domestic product (GDP), 938LIVE reported