Outlook for 1999 4. Looking ahead in the Year of the Rabbit, the global economic outlook remains positive. These two mega-economies will underpin continued growth in the world economy. If this happens, it would help provide a boost to Asia. But the prospects are uncertain and we should be prepared for a Japanese economy that continues to be weak.
Some bright spots are also discernible in the regional economies.
South Korea and Thailand are expected to post modest recovery this year, while IMF forecasts a moderation in the contraction of the other regional economies. There are, however, also a number of critical uncertainties. If these turn out well, the external environment will remain stable and favourable. This will bode well for Singapore, as a small open economy in Southeast Asia heavily dependent on external demand. We hope for such a scenario, even as we retain the flexibility to adjust our tactics if negative developments arise.