Singapore - Singapore's Prime Minister Lee Hsien Loong predicted "a bumpy year ahead" Friday as the economic problems gripping the US are starting to have an impact on Asia.

On the eve of Singapore's 43rd National Day, Lee said the last 12 months were a period of economic uncertainty worldwide.

"Considering the external challenges, Singapore's economic results are good," he said in his annual message. For the first half of 2008, growth was 4.5 per cent and expected to be between 4 and 5 per cent for the whole year.

However, with the housing crisis adding further stress to the US financial system, American consumers are spending less, affecting the whole global economy, Lee said.

"The difficulties will probably drag on well into next year before getting better," he warned.

Singapore's export-dependent economy has been buffered so far, because it was carried along by the vibrancy of the Asian region, Lee said. "But Asian economies are starting to feel the impact of America's problems, and so are we."

The Association of South-East Asian Nations (ASEAN) has become less prominent on the radar screen of investors, "who are more focussed on opportunities in China and India."

"Several ASEAN countries are pre-occupied with domestic economic and political problems," he said.

ASEAN comprises Singapore, Thailand, Malaysia, the Philippines, Indonesia, Brunei, Laos, Cambodia, Vietnam and Myanmar.

"We must look beyond immediate problems like the cost of living, to understand what is happening in the world around us, discover new opportunities and tackle our longer-term challenges," Lee said.

In addition to developing the economy, Singapore needs to reproduce its population, he noted.

Despite a series of packages aimed at encouraging couples to have more babies, the city-state is far from the 50,000 births needed annually to keep the population steady. Twenty-five per cent of its population of 4.6 million consists of foreigners.

"Year by year, fewer Singaporeans are getting married, and those who do are having fewer children," said Lee. "We have not succeeded in reversing the trend."

He said further steps will be taken to address the practical problems couples face. (dpa)