US recession likely: S’pore PM

SINGAPORE: The US will likely go into recession and Asian economies will feel its impact, Singapore’s prime minister Lee Hsien Loong was quoted as saying yesterday.
Addressing a French business meeting in Paris, Lee said “it is entirely possible, indeed likely, that America will go into a recession,” The Business Times quoted him as saying.
Lee was commenting after the US Federal Reserve, the central bank, last Tuesday made an emergency reduction in its base short-term interest rate by three quarters of a percentage point to 3.50%.
The move came with global markets in turmoil amid concerns that the fallout from a US housing market crisis will force the world’s biggest economy into recession and possibly lead to a global economic slowdown.
Lee, prime minister of Southeast Asia’s most advanced economy, said he hoped for quick passage in the US congress of an economic stimulus package announced by president George W Bush last Friday.
With the US a major market for Singapore’s exports, the city-state would be hit by a US economic slowdown, newspapers quoted him as saying.
“If it does go into recession, then we can be sure that Asia too will be affected,” Lee was quoted as saying in The Business Times.
But he said Asia was better prepared to handle an economic challenge than it was in 1997 when a regional crisis struck. – AFP