Singapore official predicts casinos will boost economy

“External demand will continue to grow but at a sluggish pace,” Lim said in response to a question in parliament. “Domestically, the opening of new facilities for the chemicals and biomedical manufacturing clusters as well as the opening of the Integrated Resorts will also provide a boost to growth.”

The island, seeking to reduce its dependence on electronics manufacturing, is allowing casinos to operate in the country for the first time and has lured investment in pharmaceutical and bio-technology industries. Genting Singapore Plc unit Resorts World Sentosa plans to open part of its us$ 4.5 billion project this month, and Las Vegas Sands Corp. says it may open the Marina Bay Sands in April.

Singapore’s economy shrank for the first time in three quarters in the October-to-December period as weaker manufacturing output interrupted the island’s rebound from its deepest slump since independence in 1965. The nation will probably avoid sliding back into a recession amid an “uneven” recovery in 2010, Lim said.

“The risk of a return to recession is low in the absence of further financial shocks,” Lim said. “But growth momentum in the second half of 2010 may slow down as the effects of global fiscal stimulus measures and inventory restocking wane.” The economy will grow 3 percent to 5 % in 2010, the minister said, reiterating a previous forecast.

Singapore’s labor market has “stabilized” as business and hiring sentiment have picked up in recent months, Lim said. More companies were planning to increase their headcounts in the last quarter of 2009 compared with earlier in the year, he said. “The unemployment rate, however, is likely to stay up for some time as it typically lags economic recovery,” Lim added.

The minister reiterated a government forecast that inflation will average between 2.5 % and 3.5 % this year. Low domestic interest rates reflect global conditions, he said.

The island has maintained a “robust” financial regulatory framework that is well placed to meet stringent global standards, helping attract funds to local markets, Lim concluded.