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, on the strength of renewed exports, before slowing to 4.9% in 2011 and 2.1% in 2012, largely a result of soft demand for exports during the second European recession. 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.
The economy will grow 3.5 percent to 4 percent in 2013 and expand as much as 4 percent next year, the trade ministry said in a statement today. It had previously forecast growth of as much as 3.5 percent in 2013. Gross domestic product expanded an annualized 1.3 percent last quarter from the previous three months, compared with a 1 percent decline estimated earlier.
Asian economies are benefiting from a demand pickup aided by the U.S. Federal Reserve’s extension of monetary stimulus even as global risks remain from budgetary wrangling in Washington and a nascent recovery in Europe. Trade-dependent Singapore said today exports will rebound in 2014 after contracting this year, easing pressure on the central bank to allow its currency to weaken to support overseas shipments.
“We are in an expansionary phase even though we should not expect it to be too robust,” said Edward Lee, regional head of research at Standard Chartered Plc in Singapore. “There are pockets of strength in external demand and that is adding to a resilient domestic economy.”
The Singapore dollar has dropped about 2.1 percent against its U.S. counterpart this year. It fell 0.2 percent to S$1.2484 against the greenback as of 9:58 a.m. local time.
sources: www.indexmundi.com, Bloomberg, www.tradingeconomics.com