SINGAPORE - Singapore's economy remains strong and growth is expected to reach around 2.5 per cent this year, higher than last year's 2 per cent.

Productivity, key to better jobs and better pay, is also improving - it rose 1 per cent last year after several years of negligible growth, and should do even better this year, said Prime Minister Lee Hsien Loong at last night's National Day Rally.

As with the early nation-building years, the country has to deal with many urgent issues, among them the economy, terrorism and international relations, he added.

"The Government is managing these issues carefully and calmly, and we hope the people will support us and work with us."

In his speeches in Mandarin and English, Mr Lee said economic performance and jobs are immediate priorities which the Government will continue to focus on.

He said that while economic transformation is progressing at an encouraging pace, it is not complete and all involved must push on.

He pledged that the Government will continue to help those affected by the restructuring process, such as professionals, managers, executives and technicians who have lost their jobs.

Finance Minister Heng Swee Keat and the Future Economy Council, together with unions and employers, are implementing industry transformation maps to guide efforts in each growth industry. Companies are also given support to upgrade and enter new markets overseas.

For example, soya snack company Xiao Ban, which was started by the son of the founder of Lao Ban Soya Bean Curd, has opened outlets in Vietnam with the help of International Enterprise Singapore.

Through SkillsFuture, the Government is also helping displaced workers and professionals retrain and reskill for new jobs.

"I believe that so long as the Government, people and industries work together, our economy will continue to grow steadily, we will open new frontiers and we will create good job opportunities for all," said Mr Lee.