Although founding Prime Minister Lee Kuan Yew's influence on Singapore runs deep, he made sure he prepared the country to move on and not "be stuck in the Lee Kuan Yew mode" of governance, Prime Minister Lee Hsien Loong said.

There was a tremendous outpouring of grief when Mr Lee died in March this year, but confidence in Singapore was not shaken.

On the contrary, it was strengthened, PM Lee noted in an interview with Time magazine, a transcript of which was released to Singapore media yesterday.

"The stock market didn't crash, investors didn't panic, confidence was maintained. In fact, at the end of that, I think confidence was strengthened. I think we're not in a bad spot," he said.

PM Lee also disclosed that his father had a great deal of influence on his own thinking on politics, culture, world affairs and life itself.

But he noted Mr Lee was very good at giving his successors "room to do things their way and pursue policies as they felt necessary".

"Only very rarely did he assert a strong view and ask us to please rethink something... Otherwise, he allowed an evolution to take place so that Singapore would carry on beyond him," PM Lee said.

Mr Lee, who died this year at age 91, stepped down as prime minister in 1990 and left the Cabinet in 2011.

In the interview, PM Lee noted that as independent Singapore turns 50, the country has kept its mission "substantially intact". That, he said, is "quite an achievement".

Singapore, however, needs to get its economy to the next level as other Asian countries snap at its heels.

"If we don't, then we will have malaise and the angst, and even disillusionment, which you see in many developed countries."

He sees the 30 per cent attending Singapore public universities rising to 40 per cent and, after graduation, they expect jobs as PMETs (professionals, managers, executives or technicians), he said.

"For us to have an economy which can generate that quality of jobs and uplift their living standards, and at the same time uplift those who didn't go to university, where you don't have a wide gap between the tertiary-educated and the rest... that is a big challenge."

Resolving it requires growth and people as well as "qualitatively different jobs, qualitatively more efficient overall economy".

Another issue raised during the interview was freedom of expression.

PM Lee was asked how he reconciled his awareness of youth's aspirations with the conviction of 16-year-old Amos Yee for an offensive video and the legal action taken against blogger Roy Ngerng for a defamatory blog post.

PM Lee said there is "always a balance between freedom and the rule of law''. Freedom is never totally unlimited. It operates within certain constraints, he added.

Giving offence to another religious or ethnic group or language is a serious matter in multiracial and multi-religious Singapore. "We've seen many cases where one Internet post injudiciously can overnight cause a humongous row," he said. It is necessary to "learn where the limits are".

On the defamation case, he said: "You can criticise the Government as much as you like on policy, on substance, on competence", but it is a serious matter to make a defamatory remark that the Prime Minister is guilty of criminal misappropriation of Singaporeans' pension funds.

"If it's true, the Prime Minister should be charged and jailed. If it's not true, the matter must be clarified and the best way to do that is by settling in court."

He added: "In an Asian society, particularly, if the leader can't maintain his standing, he doesn't deserve to be there. He will soon be gone."

He also said the Government welcomes criticism, but the problem is "the critics know they don't always have a good argument and prefer to do this by whispers and nudges rather than direct, open debate".

"When we face the critics across the aisle in (Parliament) with the television cameras on, their criticism withers. It's very sad."

Asked about future challenges, he said it depended on the timeframe.

In the next 10 years, it will be about growing the economy. Demography will be a big challenge on a 25-year timeframe and in 50 years' time, it is about having a sense of national identity, he said.

On whether he was a rebellious teenager, he said: "You don't always agree with your parents, but I never had long hair or wore bell-bottoms."