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Singapore Economy
 
 
 

General

Singapore has a highly developed market-based economy, based historically on extended entrepôt trade. Along with Hong Kong, South Korea and Taiwan, Singapore is one of the original Four Asian Tigers. The Singaporean economy is known as one of the freest, most innovative, most competitive and most business-friendly. The 2011 Index of Economic Freedom ranks Singapore as the second freest economy in the world, behind Hong Kong. According to the Corruption Perceptions Index, Singapore is consistently ranked as one of the least corrupt countries in the world, along with New Zealand and the Scandinavian countries.

Singapore is the 14th largest exporter and the 15th largest importer in the world. The country has the highest trade-to-GDP ratio in the world at 407.9%, signifying the importance of trade to its economy. The country is currently the only Asian country to have AAA credit ratings from all three major credit rating agencies – Standard & Poor's, Moody's and Fitch. Singapore attracts a lot of foreign direct investment because of its location, corruption-free environment, skilled workforce, low tax rates and advanced infrastructure. There are more than 7,000 multinational corporations from the United States, Japan and Europe in Singapore. There are also 1,500 companies from China and 1,500 from India. Foreign firms are found in almost all sectors of the economy. Singapore is also the second largest foreign investor in India. Roughly 44% of the Singaporean workforce is made up of non-Singaporeans. Over 10 free trade agreements have been signed with other countries and regions.

Singapore also possesses the world's 10th largest foreign reserves. The currency of Singapore is the Singapore dollar, issued by the Monetary Authority of Singapore. It is interchangeable with the Brunei dollar.

The Singaporean economy depends heavily on exports and refining imported goods, especially in manufacturing, which constituted 27.2% of GDP in 2010 and includes significant electronics, petroleum refining, chemicals, mechanical engineering and biomedical sciences sectors. In 2006 Singapore produced about 10% of the world's foundry wafer output. Despite its small size, Singapore has a diversified economy, a strategy that the government considers vital for growth and stability.

Tourism also forms a large part of the economy, and 10.2 million tourists visited the country in 2007. To attract more tourists, in 2005 the government legalised gambling and allowed two casino resorts (called Integrated Resorts) to be developed. Singapore is promoting itself as a medical tourism hub: about 200,000 foreigners seek medical care there each year, and Singapore medical services aim to serve one million foreign patients annually by 2012 and generate $3 billion in revenue. Singapore is an education hub, and many foreign students study in Singapore. Singapore hosted over 80,000 international students in 2006. There are also more than 5,000 Malaysians students who cross the Johor-Singapore Causeway every morning with hopes of receiving a better education in Singapore. In 2009, 20% of all students in Singaporean universities were international students. The students were mainly from ASEAN, China and India.

Singapore is a world leader in several economic areas – the country is the world's fourth leading financial centre, the world's second-biggest casino gambling market, one of the world's top three oil refining centres, the world's largest oil-rig producer and a major ship-repairer. The port is one of the five busiest ports in the world. The World Bank has named Singapore as the easiest place in the world to do business and ranks Singapore the world's top logistics hub. It is also the world's fourth largest foreign-exchange trading centre after London, New York and Tokyo.

As a result of global recession and a slump in the technology sector, Singapore's GDP contracted by 2.2% in 2001. The Economic Review Committee was set up in December 2001 and recommended several policy changes to revitalise the economy. Singapore has since recovered, due largely to improvements in the world economy; the economy grew by 8.3% in 2004, 6.4% in 2005, and 7.9% in 2006. After a contraction of 0.8% in 2009, the economy recovered in 2010, with GDP growth of 14.5%. Most work in Singapore is in the service sector, which employed 2,151,400 people out of 3,102,500 jobs in December 2010. The percentage of unemployed economically active people above age 15 is about 2%.

Singapore has the world's highest percentage of millionaire households, with 15.5% of all households owning at least $1 million. Despite its relative economic success, Singapore does not have a minimum wage, believing that it would lower its competitiveness. It also has one of the highest income inequality levels among developed countries, coming in just behind Hong Kong and in front of the United States.

Acute poverty is rare in Singapore; the government has rejected the idea of a generous welfare system, stating that each generation must earn and save enough for its entire life cycle. There are, however, numerous means-tested 'assistance schemes' provided by the Ministry of Community Development, Youth & Sports in Singapore for the needy, including some that pay out S$400 to S$1,000 per month to each needy household, free medical care at government hospitals, money for children's school fees, rental of studio apartments for S$80 a month, training grants for courses, etc.

Overview

Economy - overview : Singapore has a highly developed and successful free-market economy. It enjoys a remarkably open and corruption-free environment, stable prices, and a per capita GDP higher than that of most developed countries. The economy depends heavily on exports, particularly in consumer electronics, information technology products, pharmaceuticals, and on a growing financial services sector. Real GDP growth averaged 8.6% between 2004 and 2007. The economy contracted 1.0% in 2009 as a result of the global financial crisis, but rebounded 14.8% in 2010 and 4.9% in 2011, on the strength of renewed exports. Over the longer term, the government hopes to establish a new growth path that focuses on raising productivity, which has sunk to a compound annual growth rate of just 1.8% in the last decade. Singapore has attracted major investments in pharmaceuticals and medical technology production and will continue efforts to establish Singapore as Southeast Asia's financial and high-tech hub.
GDP (purchasing power parity) : $314.2 billion (2011 est.)
GDP (official exchange rate) : $266.5 billion (2011 est.)
GDP - real growth rate : 4.9% (2011 est.)
GDP - per capita (PPP) : $59,900 (2011 est.)
GDP - composition by sector : agriculture: 0%
industry: 26.6%
services: 73.4% (2011 est.)
Labour force : 3.212 million
note: excludes non-residents (2011 est.)
Labour force - by occupation : agriculture: 0.1%
industry: 19.6%
services: 80.3%
note: excludes non-residents (2011)
Unemployment rate : 2% (2011 est.)
Population below poverty line : NA%
Household income or consumption by percentage share
: lowest 10%: 4.4%
highest 10%: 23.2% (2008)
Distribution of family income - Gini index : 47.3 (2011)
Investment (gross fixed) : 23.4% of GDP (2011 est.)
Budget : revenues: $39.33 billion
expenditures: $38.52 billion
note: expenditures include both operational and development expenditures (2011 est.)
Taxes and other revenues
: 14.8% of GDP (2011 est.)
Budget surplus (+) or deficit (-)
: 0.3% of GDP (2011 est.)
Public debt
: 118.2% of GDP (2011 est.)
note: for Singapore, public debt consists largely of Singapore Government Securities (SGS) issued to assist the Central Provident Fund (CPF), which administers Singapore's defined contribution pension fund; special issues of SGS are held by the CPF, and are non-tradeable; the government has not borrowed to finance deficit expenditures since the 1980s
Inflation rate (consumer prices)
: 5.2% (2011 est.)
Central bank discount rate
: 0.02% (31 December 2011 est.)
Commercial bank prime lending rate : 5.4% (31 December 2011 est.))
Stock of narrow money : $102.7 billion (31 December 2011 est.)
Stock of broad money : $359.1 billion (31 December 2011 est.)
Stock of domestic credit : $334.2 billion (31 December 2011 est.)
Agriculture - products : orchids, vegetables; poultry, eggs; fish, ornamental fish
Industries : electronics, chemicals, financial services, oil drilling equipment, petroleum refining, rubber processing and rubber products, processed food and beverages, ship repair, offshore platform construction, life sciences, entrepôt trade
Industrial production growth rate : 7.6% (2011 est.)
Electricity - production : 45.37 billion kWh (2010 est.)
Electricity - consumption : 41.2 billion kWh (2010 est.)
Electricity - exports : 0 kWh (2010 est.)
Electricity - imports : 0 kWh (2010 est.)
Oil - production : 10,910 bbl/day (2010 est.)
Oil - production : 1.08 million bbl/day (2010 est.)
Oil - exports : 1.374 million bbl/day (2009 est.)
Oil - imports : 2.052 million bbl/day (2009 est.)
Oil - proved reserves : 0 bbl (1 January 2011 est.)
Natural gas - production : 0 cu m (2009 est.)
Natural gas - consumption : 0 cu m (2009 est.)
Natural gas - exports : 0 cu m (2009 est.)
Natural gas - imports : 8.4 billion cu m (2010 est.)
Natural gas - proved reserves : 0 cu m (1 January 2011 est.)
Current account balance : $56.98 billion (2011 est.)
Exports : $409.2 billion (2011 est.)
Exports - commodities : machinery and equipment (including electronics and telecommunications), pharmaceuticals and other chemicals, refined petroleum products
Exports - partners : Malaysia 12.2%, Hong Kong 11%, China 10.4%, Indonesia 10.4%, US 5.4%, Japan 4.5% (2011 est.)
Imports : $36.55 billion (2011 est.)
Imports - commodities : machinery and equipment, mineral fuels, chemicals, foodstuffs, consumer goods
Imports - partners : Malaysia 10.7%, US 10.7%, China 10.4%, Japan 7.2%, South Korea 5.9%, Taiwan 5.9% (2011 est.)
Reserves of foreign exchange and gold : $237.7 billion (31 December 2011 est.)
Debt - external : $23.59 billion (31 December 2011 est.)
Stock of direct foreign investment - at home : $NA (31 December 2011 est.)
Stock of direct foreign investment - abroad : $288.4 billion (31 December 2010 est.)
Exchange rates : Singapore dollars (SGD) per US dollar - 1.234 (2011 est.); 1.3635 (2010 est.); 1.4545 (2009); 1.415 (2008); 1.507 (2007)
 

 
 

 


 


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