Singapore's Deputy Prime Minister and Minister for Finance Tharman Shanmugaratnam has said that he was worried about the increased risks of slowdown in economic growth for both the developed economies and the developing economies.
Tharman, who was also minister for manpower, said in an interview carried by local daily Lianhe Zaobao on Monday that the growth in the developed economies such as the United States, Europe and Japan was likely to stall to a speed of no more than 1 percent for a period of time to come.
The emerging economies such as China, India and Brazil, while faring better than the developed economies, will experience slower economic growths, too, he said.
The risks are now much higher than what was seen six months ago given that the possibility of the policy makers running into political barriers were much higher than it was a year ago, he said.
Technically it is not difficult to find the way out of the economic challenges as the European countries and the United States would have to go through a period of fiscal discipline and spend less, but it is not easy for the leaders there to reach consensus and have decisive actions, he said.
Surveys were showing that people's confidence in their leadership have been eroding.
The developed countries had been trying to get the best out of their policies in the short term over the past decades, forcing them to sacrifice their short term interests to save the long-term prospects, Tharman said.
Nevertheless, Tharman added that it was not yet the "end of the world" for the world economy, as it is not difficult to find the solutions technically. Instead, they would have to overcome political challenges to succeed in addressing the current situation.