The reason: India and China's continued growth. But it will take one to two years for the effect of this buffering factor to show, he added.

Mr Lee was speaking to the Singapore media in Riyadh on Tuesday, a day after the global stock market crashed in what the media dubbed as Black Monday. But there are opportunities to be found amid the turmoil, he said.

Asked how Saudi Arabia can sharpen its economic competitiveness, MM Lee said one way is for it to invest its reserves judiciously.

'With the collapse of the international stock market, this may be a magnificant opportunity to accquire non-controlling quantities of equity in some of the world's biggest corporates with worldwide franchise which are bound to recover by next cycle, and you're invested in very long term,' he said.