Singapore enjoys a highly developed and successful free-market economy, a remarkably open and corruption-free business environment, stable prices and one of the highest per capita gross domestic products in the world. Exports, particularly in electronics and chemicals, and services provide the main source of revenue for the economy. Singapore is positioning itself as the region’s financial and high-tech center.
Singapore’s economic strategy proved a success, producing real growth that averaged 8.0% from 1960 to 1999. The economy picked up in 1999 after the regional financial crisis, with a growth rate of 5.4%, followed by 9.9% for 2000. However the economic slow down in the United States, Japan and the European Union, as well as the worldwide electronics slump, followed closely with a 911 attack in the heart of New York had reduced the estimated growth in 2001 to a negative 2.0%.
The economy expanded by 2.2% once again the following year, 2002 and by 1.1% in 2003 when Singapore was greatly affected by the SARS outbreak. Though SARS caused a negative growth for the first half of the year, Singapore quickly recovered itself and gave a positive growth instead. Subsequently a major turnaround occurred in 2004 allowed it to make a significant recovery in Singapore, although the actual growth fell short of the target growth for the year more than half with only 2.5%.
Factors contributing to Singapore Economy in past 5 years
Singapore’s largely corruption-free government, skilled workforce, due to the success of its education policy, and efficient infrastructure have attracted investments from more than 3,000 multinational corporations from United Stated, Japan and Europe. Foreign firms are found in almost all sectors of the economy, despite Singapore’s relatively high-cost operation environment. Also Singapore owns Temasek-linked companies, which particularly in manufacturing, that operate as commercial entities and accounted for 60% of GDP.
Manufacturing and financial business services are the twin engines of the Singapore economy and accounted for 26% and 22%, respectively of Singapore’s GDP in 2000. The electronics industry leads Singapore’s manufacturing sector, accounting for 48% of Singapore’s total industrial output. However the Government also is prioritizing development of the chemicals and biotechnology industries. The U.S. leads in foreign investment, accounting for 40% to the manufacturing sector. More than 1,500 U.S. firms operate in Singapore.
EXPENDITURE ON GROSS DOMESTIC PRODUCT
Private Consumption Expenditure65,798.167,910.769,972.370,359.076,390.1 Government Consumption Expenditure17,776.018,572.119,591.819,159.318,848.5 Gross Fixed Capital Formation52,933.850,537.045,129.143,037.346,648.5 Changes in Inventories2,520.6-6,724.0-4,127.9-14,684.1-10,325.6 Net Exports of Goods & Services25,918.831,645.736,667.851,445.252,155.3 Statistical Discrepancy-2,568.3-2,729.2-2,977.9-2,824.9-3,220.8 GROSS DOMESTIC PRODUCT BY INDUSTRY
GDP AT 1995 MARKET PRICES162,379159,212164,255166,492180,496 Goods Producing Industries54,60249,68351,29351,51156,604 Manufacturing40,71236,00038,79439,85845,397
Other Goods Industries188177167166184
Services Producing Industries100,596103,012106,162107,527115,593 Wholesale & Retail Trade20,57719,89620,41721,78924,970 Hotels & Restaurants3,7853,7643,6973,3303,742
Transport & Communications20,52121,33422,65022,23724,264 Financial Services17,26117,90817,17017,91118,987 Business Services21,87622,32123,37923,02823,537 Other Services Industries16,57617,78918,84919,23320,093 *Extract from Economic...