SINGAPORE -- Singapore's productivity could improve a little bit more this year, having achieved 1 per cent growth in 2016, said Prime Minister Lee Hsien Loong.

Speaking at a National Day dinner at his ward in Teck Ghee, Lee pointed out that 2016 was the first time in several years that a positive productivity figure had been achieved.

Productivity is important because it means each worker is able to produce more and therefore we can earn more, therefore the company can do better, therefore Singapore can progress, said Lee.

This year, our productivity may do a little bit better still and that's an encouraging sign, he added. It shows that our policies are working, we are able to upgrade our economy and we are able steadily to improve everybody's lives.

Speaking in Malay, Chinese and English, Lee said Singapore is celebrating its 52nd birthday in a good situation.

It's not quite like SG50 but there's still much for us to celebrate, he said. The country is doing well, the economy continues to grow.

The economy is expected to grow about 2.5 per cent this year, higher than the figure seen last year and what had been projected earlier in the year. Lee noted this has translated to more jobs and higher wages, although a lot of work still has to be done.

For example, the Committee on the Future Economy is working with unions and industries to implement Industry Transformation Maps. Workers and professionals who have been displaced from their jobs are also getting help to retrain and reskill through the SkillsFuture initiative.

However, Lee reiterated his National Day message, stressing that even as Singapore deals with immediate preoccupations, it also has to prepare for the distant future.

The prime minister emphasised that he will be speaking more about pre-schools, the war on diabetes and Singapore's smart nation initiative during his National Day Rally speech next week.