Worried about divergent growth patterns between different businesses and income groups, Economists said a dual economy is emerging in Singapore, according to a Channel NewsAsia report on Thursday.

At an annual Singapore Perspectives Seminar, economists said that businesses catering to global markets are seeing robust growth, but companies serving the domestic markets are lagging behind as private consumption is growing at only 3 percent or less than half the gross domestic product (GDP) expansion of 8 percent.

Another example, in the residential property sector, compared to the booming luxury demand from foreign buyers, demand at the mass market level remains sluggish, the report said.

In light of sluggish domestic demand, economists called for the government to mull the implementation of the goods and services tax (GST) hike, saying it might further dampen private consumption.

Economists also asked the government to reduce income tax rates for the lower and middle income groups.

They expected GDP growth to moderate this year, reflecting slower growth of business and consumer spending in the United States.

But they were confident about the Singapore economy, saying Singapore is well poised to handle the downturn due to a diversified economy and strong Asian demand.

Source: Xinhua