SINGAPORE - In the next five years, Singapore's economy is expected to grow by 2 per cent to 4 per cent per annum on average, the Ministry of Trade and Industry (MTI) said on Tuesday.
The government had previously envisaged growth of 3-5 per cent per annum for the decade as a whole.
The lower forecast range was first announced by Deputy Prime Minister and Finance Minister Tharman Shanmugaratnam on April 29, at NTUC's May Day dinner.
"The revised medium-term growth forecast range takes into account downside risks arising from an uncertain global economic environment, as well as the expected slowdown in resident workforce growth due to our ageing population," MTI permanent secretary Ow Foong Pheng said at the release of Singapore's first quarter GDP data.
The Singapore economy grew at a compounded annual growth rate of 6.4 per cent from 2009 to 2014, driven by both workforce growth (3.8 per cent) and productivity growth (2.5 per cent).
But resident workforce growth will drop to an average of 20,000 per year towards the end of the decade, a sharp slowdown from the growth of 66,000 on average in the last five years, MTI said.
To achieve growth of 2 per cent to 4 per cent per annum, economic restructuring and innovation will be the focus to raise productivity, it said.
Productivity growth is crucial to achieve sustainable economic growth as workforce growth slows. This will help to overcome constraints of a tight labour market and raise income levels of Singaporeans.