S'pore warns Asia to expect lower growth for years to come

SINGAPORE: Singapore's finance minister warned Asia to expect lower economic growth for years to come as a weakened U.S. consumer buys less of the region's exports.

"We have to accept that it will be a lower growth world, there's no other way of resolving the problem of excessive household debts in the U.S." Finance Minister Tharman Shanmugaratnam said Tuesday in a speech as the gross domestic product (GDP) expansion in Asia will likely fall to an average 6.5 percent over the next few years from 9 percent during the 2002 to 2007 period.

Singapore, along with other export-dependent countries such as South Korea, Taiwan and Hong Kong, has been especially hard hit by the global recession and collapse in consumer demand from the U.S. and Europe. The government expects GDP to shrink up to 9 percent this year, the biggest contraction since splitting from Malaysia in 1965.

Tharman urged regional governments to develop social security and health insurance policies that would free Asian consumers to save less and spend more.