A

Project Report
On
Singapore Economic
Submitted to

UDAYBHANSINHJI REGIONAL INSTITUTE OF CO-OPERATIVE

MANAGEMENT, GANDHINAGAR (GUJARATH)

Under the Guidance of

Dr. Harishchandra Singh Rathod
Director, Shri Jairam Bhai Patel Institute of Business Management, Gandhinagar
For

MACROECONOMICS
PGDM-ABM 2022-24 (SECOND TRISEMISTER)

Prepared by:

D Kiran Kumar (15222407)

Ritik Rathore (15222426)
Shahrukh Beg (15222432)
Shirsath Gaurav Balasaheb (15222433)
Yellapragada Lakshmi Priya (15222440)

JANURARY 2023

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 Preface

This report on Singapore Economy is prepared by group of 5 students pursuing PGDM ABM
first year.This report is highlighted with Introduction of Singapore which comprises of
Republic of singapore, History of singapore which tells about fall and development of
singapore and overview of singapore country.This report is also comprised of Inflationary
trend of singapore of past 10 years, Import and Export Scenario of Singapore with top 10
Import and Export partners. The report is also highlighted with GDP and GDP Growth Rate of
Singapore annually from 2012 to 2021. We have also included Employment and
Unemployment scenario of singapore of past 10 years. Major Macro Economic variables of
singapore is added in the report which includes Economic Outlook of singapore, GDP,GDP
Growth Rate, GDP per Capita Income, GNI, Inflation Rate of past 10 years, ways in which
singapore inflation is been measured,Interest Rate, Foreign Exchange Reserves and Taxation
System of Singapore.We have also mentioned the India and Singapore Relationship which
adds knowledge of signifance of singapore for India, Cultural and Strategic Relationships, The
5-S Plank, Defence Cooperation between India and Singapore,Science and Technological
Relationships and Commercial Relationships which includes Trade,Economic and
Development Cooperation.

We have done the Project Report with utmost care and took responsibility to present the
accurate data.We are thankful to Dr.Harishchandra Singh Rathod Sir for giving us this
opportunity to present the report by which we have gained knowledge of Singapore Economy
along with India and Singapore Relationship.

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 ACKNOWLEDGEMENT

Working on this project on "A Project Report on Singapore Economic" was a source of
immense knowledge to us. We would like to express our sincere gratitude to our Economics
Faculty Dr. Harishchandra Singh Rathod Sir whose valuable guidance has been the ones
that helped us patch this project and make it full proof success, his suggestions and his
instructions has served us as the major contributor towards the completion of the project .

We wish to put on record the appreciative original work of all the authors of various technical
papers which we have referred in our project without whom it was very difficult to achieve
successful completion of the project.

We acknowledge with a deep sense of gratitude, the encouragement and inspiration received
from our Classmates. Then we would like to thank our parents and friends who have helped us
with their valuable suggestions and guidance has been helpful in various phases of the
completion of the project.

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 Executive Summary

In the decades after independence, Singapore rapidly developed from a low-income country to
a high-income country. GDP growth in the city-state has been amongst the world’s highest, at
an average of 7.7% since independence and topping 9.2% in the first 25 years.

The overall growth of the Singapore economy was 3.2% in 2018. Value-added manufacturing,
particularly in the electronics and precision engineering sectors, remain key drivers of growth,
as are the services sector, particularly the information and communications industries, which
grew 6.0% year-on-year, and the finance & insurance industries, which grew 5.9% year-on-
year.  Economic growth is expected to moderate in 2019, with the government forecasting a
range of 1.5% to 3.5%, projecting the rate to be slightly below the middle of the forecast range.

Singapore has gone through a rapid transformation during the last forty-five years. From an
entrepot predominantly towards commerce and services in the mid-1960s into an economy.
which presently specialising in high value manufacturing activities, and regional financial hub
for business services in East Asia. This paper aims to overview the issues of the role of state
and foreign investment, which has played an important role in achieving rapid economic
growth. For instance, in 2002 Singapore's GDP was 24 times compared to 1965 levels. The
average annual growth rate for GDP between 1965 and 2006 was nearly 8% and GNP
increased slightly higher over this period. The study examines the international environment
and how it contributed to achieve higher rates of growth. The study will also argue that the
historical factors seem to be important in determining a country's development strategies.

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 Index
 Preface……………………………………i
 Acknowledgement……………………….ii
 Executive Summery……………………..iii

Sr. No. Name Page No.

1 PROFILE OF SINGAPORE
2 INFLATIONARY TREND OF SINGAPORE
3 IMPORT AND EXPORT SCENARIO OF SINGAPORE
4 GDP AND GDP GROWTH RATE OF SINGAPORE
5 EMPLOYMENT AND UNEMPLOYMENT SCENARIO
6 MAJOR MACROECONOMIC VARIABLES
7 INFLATION RATE OF LAST 10 YEARS
8 TAXATION SYSTEM
9 INDIA- SINGAPORE RELATIONSHIP

 Biblography…………………….. iv

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 PROFILE OF SINGAPORE
Republic of Singapore
Singapore is a highly developed, high-income country and is considered to be among the top 5
richest country in the world today and also one of the cleanest countries with next to no
corruption or other crimes and No. 1 Asian country in the truest sense.
But a few decades ago in the 1950s, this is what Singapore looked like
 The unemployment rate was very high
 Communal riots were erupting
 Singapore is one of the largest slum colonies in the world
 They neither had a large population to depend on
 They don’t have vast lands
 They don’t have any natural resources like coal or oil
In spite of these disadvantages within just 35 years Singapore went from being a slum city to
becoming one of the richest countries in the world.

History
1.The Fall of Singapore:
In 1819 British East India company Thomas Raffles bought Singapore from the sultan of Johor
and entered this island.
Thomas Raffles turned Singapore into free port, so any ship passing through would not have to
pay any fees, tax and custom duty this reason gave rise to free trading in Singapore and in 1869
the Suez Canal became operational so that the ships did not need to go around Africa and these
led to even more ships coming to Singapore and most ships used Singapore as a refuelling
station.
In the nearby country, Malaysia, two industries were very popular Tin & Rubber science
Singapore was close by and became a rubber-processing hub as well.
But on 15th February 1942, the Japanese invaded into Singapore and Malaysia and Singapore
surrender to Japanese and these Japanese rules completely destroyed Singapore.
The Japanese lost the war in 1945, and with draw from Singapore, but by that time there are
more than 30000 opium addicts, widespread gambling and prostitution in the country,
buildings were heavily destroyed and there was large-scale poverty, high unemployment, and
the place was crawling with diseases and Singapore had turned into a slum colony.
After the WW2 the British reclaim Singapore control, and the British military administration
tried to get things under some control, The basic services of gas, water, electricity were
restored.
In 1948 the first elections were held and Singapore constitution was framed and in 1959 proper
elections were conducted and the young leader young Lee Kuan Yew became the first prime
minister of Singapore.

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Initially Lee Kuan Yew believed that Singapore will not be able to survive as an independent
country and they should become a part of Malaysia, He did these in 1963 he merged Singapore
with Malaysia.
But due to differences, in 1964 Communal tensions raised and racial riots were also seen due to
these riots Singapore once again separated with Malaysia and became an independent country
Republic of Singapore.
In 1967 Britain announced that they would with draw their troops from Singapore and would
leave the country altogether but for Singaporeans these was problematic because British forces
provided a large number of jobs to the Singaporeans and they don’t have any defence and if the
British left, they would have been defenceless for these reason Lee Kuan Yew requested the
British to postpone their departure and give them proper time to transition and the British
agreed and gave a deadline of 4 years.
Then the prime minister Lee Kuan Yew focused on 3 important pillars that laid down the
foundations for Singapore’s progress.
The first thing he did was identified the risk points and design a strategic solution for each one
of these high-risk elements. There were 3 areas wherein they possessed high risk:
1. The British army was planning to withdraw so they had to build an army from scratch
2. The Britishers employed a lot of people which is why at least 30,000 jobs have to be
created before Britishers left
3. Building Infrastructure and build businesses of their own or invite for an investment
into the island.
These is where the first pillar came in and that is building an army from scratch and just like
Israel national service was made mandatory for all men above the age of 18 by something
called National service act 1967.
Now these gave the island 2 major benefits the first was obviously an army of their own but
secondly each one of these cadets was taught in the school that the greatest threat to the country
is not an invasion from an outsider but the conflict between the insiders and the military
foundations laid for both army and unity of the country.
Second high-risk element and that is creating jobs and these is where Lee Kuan Yew
perspective of learning from other countries came in very handy and found that the era of
1960s was all about electronics.
So, the government of Singapore enacted new laws which would lower the labour cost and
gave out amazing incentives to the company by lowering the taxes on imports and exports
duties.
This is very similar to that of razor blade model wherein the land and import duties are like
razors which are given away at a dirt-cheap cost just so that the government can create a
recurring income out of the taxes on the profits of the company and the salaries of the
employees.
How incredible and futuristic this vision was Singapore opened up in 1960s itself while China
opened up in 1978 and India opened up in 1990s these is how Singapore evaded the second
risk.
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And the third pillar is Strategic infrastructure investment and from 1963 to 1975, the
government of Singapore took 14 loans from the world bank and 10 of these loans were
exclusively invested to the infrastructural projects. And 2 of the most mind-blowing projects
are the Jurong port and Jurong town corporation (JTC). Both these projects were implemented
such that Singapore could leverage the only valuable asset they had and that is the strategic
location for trade. Singapore invested 14$ million to build Jurong port and today the Jurong
port generates a revenue of more than $150million dollars every single year.

The Jurong town corporation that was initiated during the old days of Singapore today it has
become a major contributor to the economy and in 2021 alone it has generated a revenue of
$2.43 billion dollars.
Now the most incredible infrastructural project of Singapore and that is the fixing of the
housing crisis and Lee Kuan Yew made it a priority to not just build houses but to also make
sure that people of every community lived together without being segregated and where the
Housing development board (HBD) came in and they executed 3 wonderful strategies
1. In order to make houses affordable they made it mandatory for the people of Singapore
below the age of 55 to save 20% of there income into a social savings fund and these is
called Central Provident Fund and employees also asked to contribute 17% to the fund
and these money could be spent only on specific essential or on housing and for those
who couldn’t apartments were given at subsidized rates on rents so that when these
people had enough money in their savings account and they could take a low interest
loan, eventually, buy the house itself.
2. To prevent these societies from deteriorating into a modern slum the HDP ensured high
quality maintenance and a hygiene a priority
3. And last and importantly the beauty of their town planning is that they introduced
something called the Ethnic Integration Policy in 1989 by which every building has a
specific quota for every ethnic group depending on the population ratio and these
avoided clusters to a large extent and minimized.

Today, Singapore is such an amazing place to do business that people brag about how you can
open up a company in Singapore in less than 3 hours. And the medical facilities are so good
that the leaders of other nations take a special trip to Singapore to admit into the hospital and
get themselves treated these are the high standards that Lee Kuan Yew set for the people of
Singapore and in 35 years of his governance, the per capita GDP of the country grew by an
astonishing 2800% and went from just $400 to $14500.

Country Singapore
Independence 9 August 1965
Government Unitary Parliament Republic
President Halimah Yacob

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 Prime Minister Lee Hsien Loong
Capital City Singapore
Population 5.64 million
Density 7804/km2
Currency Singapore dollar S$
Nationality Singaporean
Official Language Malay, English, Tamil, Mandarin Chinese
Area 728.6km2
Ethnic Group Chinese (75.9%), Malay (15.0%), Indian (7.5%), Others
(1.6%)
Religion Buddhism (31.1%), No Religion (20%), Islam (15.6%),
Christians (11.9%), Catholicism (7%), Hinduism (5%),
Sikhism (0.6%)
Literacy 97.6%
ISO Country code SG
Country calling code + 65
Labour force by occupation Agriculture (0.7%), Industry (25.6%), Services (73.7%)
Ease of doing Business 2nd
Exports Integrated Circuit, Refined petroleum, Pharmaceuticals,
Chemical products
Imports Machinery & Equipment (33%), mineral fuels & oils
(14.9%), Foodstuffs, Consumer goods
Import Countries China (15.51%), Malaysia (11.09%), United
states(10.20%), Japan (7.27%), Taiwan (5.82%)
Export Countries China (24.8%), Hong Kong(13.67%), Malaysia(9.43%),
United states(8.45%), Indonesia(7.72%)
Inflation 6%
Currency Exchange Rate 1 USD equals to 1.323 Singapore dollar

The economy of Singapore is a highly developed free-market economy with dirigiste

characteristics. Singapore's economy has been previously ranked as the most open in the world,
the joint 4th-least corrupt, and the most pro-business. Singapore has low tax-rates and the
second-highest per-capita GDP in the world in terms of purchasing power parity (PPP).

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Alongside the business-friendly reputation for global and local privately held companies and
public companies, various national state-owned enterprises play a substantial role in
Singapore's economy.
Singapore's economy is often referred to as a "miracle" due to its rapid transformation from a
developing country to a developed, high-income economy in a relatively short period of time.
This transformation took place in the second half of the 20th century under the leadership of
Prime Minister Lee Kuan Yew and his government. One of the key factors contributing to
Singapore's economic miracle was its strategic location, which made it an ideal hub for
international trade and commerce.

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 INFLATIONARY TREND OF SINGAPORE

Inflation rates in Singapore

The inflation rate for consumer prices in Singapore moved over the past 60 years
between -1.8% and 22.4%. For 2021, an inflation rate of 2.3% was calculated.
During the observation period from 1961 to 2021, the average inflation rate was 2.5%
per year. Overall, the price increase was 324.54%. An item that cost 100 dollars in 1961 costs
424.54 dollars at the beginning of 2022.

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 IMPORT AND EXPORT SCENARIO OF SINGAPORE

Import Scenario
Singapore Import Data
Singapore is a sovereign island city-state in maritime Southeast Asia. In terms of global
imports, Singapore stood at 16th position in 2020. According to Singapore import data,
Singapore imported goods worth USD 329 billion in 2020, down by -8.3% as compared to
previous year. Singapore imported goods worth USD 359 billion in 2019, Singapore trade data
reveals.
Given Singapore’s population of about 5.8 million people, total value of Singapore’s
imports in 2020 translated to roughly USD 57,000 in yearly product demand from every person
in the strategically located Asian nation.
Product-wise, Singapore’s major imports are machinery & equipment, mineral fuels &
oils, foodstuffs and consumer goods. Based on Singapore trade statistics, Singapore’s main
import partners are China, European Union, Malaysia, United States and Japan.
Singapore import data is based on actual shipping recorded collected from Port
Authorities, Shipping & Logistics Companies, Trade Associations, Government Bodies and
other authorized sources. It contains both facts and figures that are crucial to know and
understand country’s import activities. Singapore trade data contains information related to
import-export documents like import bills, shipping bills & invoices.
Singapore import data is also useful to analyze trade of particular commodities at all HS
classified system codes. Whether you want to know which products Singapore imports the
most or which industries are popular into the country; Singapore shipment data covers
information on every product and industry. We also provide historical Singapore trade data,
which is available from 2008 onwards. Singapore import data covers 4400000+ shipment
records and 50000+ total importers.
Singapore import data contains valuable information on all market components
including trading partner, HS Code, product, import value, import quantity and so on.
Singapore import statistics also help you analyze import traffic at various ports in Singapore
with information about mode of transport. On the whole, Singapore trade data contains all
important columns that are useful in understanding every market aspect of Singapore. Here is a
sample of Singapore import data and understand what information you will find in data.

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Top 10 Imports
Based on Singapore import data, Singapore’s top 10 import commodities in 2020 were
Electrical Machinery & Equipment (33%), Machinery (16%), Mineral Fuels & Oils (14.9%),
Pearls and Precious Stones (6.8%), Optical, Photographic, Medical Equipment (3.8%), Plastics
& Articles (2.1%), Organic Chemicals (2.1%), Aircraft, Spacecraft & Parts (1.9%), Essential
Oils & Resinoids (1.2%) and Miscellaneous Chemical Products (1.2%).

According to Singapore import statistics, Singapore’s top 10 import products accounted

for 83% to overall value of shipments recorded in 2020. Singapore trade data also shows
imported gems & precious metals was the fastest growing top category thanks to its 19.7%
year-over-year gain. Singapore shipment data reveals, leading decliner among top 10 import
categories was aircraft and spacecraft due to its -45.1% drop year over year. Below given chart
shows dollar amount of Singapore’s top 10 import commodities recorded in 2020.

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Top 10 Import Partners
Singapore import data shows Singapore’s top 10 import sources in 2020 – China (USD
47.4 billion), Malaysia (USD 41.8 billion), Taipei, Chinese (USD 36.3 billion), United States
(USD 35.1 billion), Japan (USD 18.1 billion), South Korea (USD 15.5 billion), Indonesia
(USD 13.9 billion), France (USD 10.2 billion), Thailand (USD 9.7 billion) and Germany (USD
8.8 billion).
According to Singapore trade data, Singapore’s top 10 import partners accounted for
about 72% to overall value of import shipments registered in 2020. Region-wise, about 68% of
Singapore’s total imports by value in 2020 were imported from fellow Asian countries.
European trade partners shipped 15.2% of goods to Singapore, while 11.9% worth of goods
originated from North America. Smaller percentages came from Oceania (1.8%), Africa (1.2%)
and Latin America (1.1%). Here is a chart which shows percentage share of Singapore’s top 10
import partners in 2020.

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 Export Scenario
Singapore Export Data
Singapore is a sovereign island city-state in maritime Southeast Asia. It has a highly-
developed free-market economy. According to Singapore export data, Singapore was 15th
world’s largest exporter country in 2020.
From the latest Singapore trade data available, we reveal Singapore’s exports totalled
USD 374.2 billion in 2020, a -4.1% decline from 2019 to 2020. In 2019, Singapore shipped
goods worth USD 390.3 billion to global countries. Given Singapore’s population of 5.77
million people, the value of total exports in 2020 translated to roughly USD 64,900 for every
resident in the exports-dependent nation.
Based on Singapore trade statistics, Singapore’s major export commodities are
machinery & equipment, electronics & telecommunications, pharma products and refined
petroleum products & chemical goods. Singapore shipment data shows Hong Kong, European
Union, Malaysia and the United States are main export partners of Singapore.
Singapore export data is a collection of statistics collected from authorized sources
including Port Authorities, Shipping & Logistics Companies, Trade Associations &
Government Bodies to provide a 360 degree visibility into country’s export activities.
Singapore trade data we provide helps you connect with businesses, monitor your competitor’s
shipments and analyze other market aspects. Singapore export data covers 2500000+ shipment
records and 20000+ exporters.
Singapore shipment data covers shipping information on all HS classified products that
help you understand which products and industries are popular in Singapore. So, Singapore
export statistics cover complete details of country’s export market. Singapore export data is
available from 2008 onwards, which help you compare past and present market scenario.
Singapore export data covers all market components from product to numerical values
of traded commodity that help you analyze country’s business activities. From Singapore trade
data, you can also find and analyze which are the largest export partners of Singapore. If you
want to which ports of Singapore are handling the highest export traffic, you can get Singapore
shipment data on ports. On the whole, Singapore export data is a good source to get a bigger
picture of country’s export developments. Check sample to know which fields are available in
Singapore export data.

Top 10 Exports
Singapore trade statistics show Singapore’s top 10 exports in 2020 were Electrical
Machinery & Equipment (35.3%), Machinery (15.5%), Mineral Fuels & Oils (8.1%), Optical,
Photographic, Medical Equipment (5.5%), Pearls & Precious Stones (5.4%), Plastics (3.4%),
Organic Chemicals (3.0%), Essential Oils and Resinoids (2.5%), Pharma Products (2.5%) and
Miscellaneous Edible Preparations (2.3%).

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According to Singapore export statistics, Singapore’s top 10 export commodities accounted for
83.5% to overall value of shipments recorded in 2020. Gems and precious metals was the
fastest grower among the top 10 export categories, up by 14.5% from 2019 to 2020. Singapore
shipment data shows leading decliner among Singapore’s top 10 export categories was mineral
fuels including oil thanks to a -36.7% drop year over year. Below given chart shows dollar
amount of Singapore’s top 10 export products recorded in 2020.

Singapore’s Top 10 Export Partners

Singapore trade data reveal list of Singapore’s top 10 export destinations in 2020 –
China (USD 51.4 billion), Hong Kong (USD 46.2 billion), United States (USD 40.1 billion),
Malaysia (USD 33.3 billion), Indonesia (USD 21.4 billion), Taipei, Chinese (USD 18.2
billion), Japan (USD 17.8 billion), South Korea (USD 16.7 billion), Thailand (USD 14.1
billion) and Vietnam (USD 12.4 billion).
Based on Singapore shipment data, Singapore’s top 10 export partners in 2020 accounted for
69.5% to overall value of shipments. From a continental perspective, about 70% of Singapore
exports by value were delivered to Asian countries, while 10% were sold to importers in North
America. According to Singapore export data, Singapore supplied another 10% worth of goods
to Europe. Smaller percentages were recorded from Oceania (3%), Latin America (1%) and
Africa (1%).

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 GDP AND GDP GROWTH RATE OF SINGAPORE

What is GDP
GDP measures the monetary value of final goods and services—that is, those that are
bought by the final user—produced in a country in a given period of time (say a quarter or
a year). It counts all of the output generated within the borders of a country

Nominal GDP growth rate of Singapore

Singapore Nominal GDP Growth was reported at 10.872 % in Sep 2022. This records a
decrease from the previous number of 11.350 % for Jun 2022. Singapore Nominal GDP
Growth data is updated quarterly, averaging 9.470 % from Mar 1976 to Sep 2022, with 187
observations.

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Singapore Economic Growth Rate
GDP Annual Growth Rate in Singapore averaged 6.26 percent from 1976 until 2022, reaching
an all time high of 18.60 percent in the second quarter of 2010 and a record low of -12.20
percent in the second quarter of 2020.

Annual Growth Rate of Singapore

The annual average rate of change of population size, for a given country, territory, or
geographic area, during a specified period. It expresses the ratio between the annual increase
in the population size and the total population for that year, usually multiplied by 100.

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 Singapore Annual Growth Rate

$423 billion (nominal; 2022) $700 billion (PPP;

GDP
2022)

GDP
37th (nominal; 2022) 38th (PPP; 2022)
rank

GDP
7.6% (2021) 3.0% (2022f) 2.3% (2023f)
growth

Singapore GDP per capita ranking

# Country GDP (nominal)

per capita (2017)

1 Qatar $61,264

2 Macao $80,890

3 Luxembourg $105,280

4 Singapore $56,746

Is Singapore economy better than India?

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Economy: Singapore has a GDP per capita of $93,400 as of 2020, while in
India, the GDP per capita is $6,100 as of 2020.

Total Statistics of Singapore

Population  5,453,566 (2021)
GDP  $423 billion (nominal; 2022)  
$700 billion (PPP; 2022)

GDP rank 37th (nominal; 2022)

38th (PPP; 2022)
GDP growth  7.6% (2021)
 3.0% (2022f)
 2.3% (2023f)
GDP per capita  $79,426 (nominal; 2022)
 $131,425 (PPP; 2022)
GDP per capita rank 6th (nominal; 2022)
2nd (PPP; 2022)
GDP by sector agriculture: 0.5%
industry: 24.8%
services: 75.2%
(2017 est.)
Inflation (CPI) 1.101% (2021 est.

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 EMPLOYMENT AND UNEMPLOYMENT SCENARIO OF SINGAPORE
EMPLOYMENT:-
Employed Persons in Singapore averaged 2839.76 Thousand from 1994 until 2022,
reaching an all time high of 3897.50 Thousand in 2022 and a record low of 1714.20
Thousand in 1994.

Employment Change in Singapore averaged 19.09 Thousands Person from 1994 until
2022, reaching an all time high of 75.60 Thousands Person in the third quarter of 2022
and a record low of -121.80 Thousands Person in the second quarter of 2020.

source: Ministry of Manpower Singapore

Fig.singapore-employed-persons-Data

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UNEMPLOYMENT:-
Unemployment refers to the share of the labor force that is without work but available for and
seeking employment.

Unemployed Persons in Singapore averaged 65.58 Thousand from 1967 until 2022,
reaching an all time high of 139.90 Thousand in 2020 and a record low of 25.80
Thousand in 1990.

Unemployment Rate in Singapore averaged 2.44 percent from 1986 until 2022,
reaching an all time high of 6.00 percent in the first quarter of 1986 and a record low
of1.40 percent in the second quarter of 1990.

source: Ministry of Manpower Singapore

singapore-unemployed-persons-Data

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SECTOR-WISE EMPLOYMENT DATA FOR SINGAPORE:
Service Sector - 80.5%

Manufacturing Sector - 13.5%

Construction Sector - 3.5%

Financial and Insurance Sector - 2.5%

The service sector is the largest employer in Singapore, followed by the manufacturing sector.
While the construction and financial sectors employ fewer people, they still play important
roles in Singapore's economy.

Note: The data is for the year 2020 and is based on information provided by the Ministry of
Manpower in Singapore.

MAJOR MACROECONOMIC VARIABLES OF SINGAPORE

SINGAPORE ECONOMIC OUTLOOK

As of June 2022, First-quarter GDP growth was revised upwards to 3.7% from a preliminary
reading of 3.4%. Manufacturing growth was stronger than previously estimated, while robust
private consumption was supported by the reopening of the economy. Moving to the second
quarter, the economy seems to be performing solidly. Industrial production expanded at a
robust pace in April, supported by the transport engineering sector. Moreover, in April and
May the manufacturing and electronics PMIs remained in expansionary territory. On the
downside, export growth cooled in April, weighed down by Covid-19 lockdowns in China,
although it regained traction in May. Meanwhile, the IMF concluded its Article IV Mission in
late May, praising the government’s tightening monetary policy stance and prudent
normalization of fiscal policy following its timely policy response to the pandemic.

The Gross Domestic Product per capita Income:-

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The Gross Domestic Product per capita in Singapore was last recorded at 66176.39 US dollars in 2021
and record low of 3612.02 USD in 1960

GDP per capita is gross domestic product divided by midyear population

 Singapore GDP per capita for 2021 was $72,794, a 19.87% increase from 2020.
 Singapore GDP per capita for 2020 was $60,729, a 7.75% decline from 2019.
 Singapore GDP per capita for 2019 was $65,831, a 1.54% decline from 2018.
 Singapore GDP per capita for 2018 was $66,859, a 9.34% increase from 2017.

Fig:-Gross Domestic Product per capita Income

GDP per Capita purchasing power parity (PPP):-

GDP per Capita PPP in Singapore averaged 68379.73 USD from 1990 until 2021, reaching an all time
high of 106032.22 USD in 2021 and a record low of 37289.75 USD in 1990.

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 Fig:-GDP per Capita purchasing power parity (PPP):-

What Is Inflation?

Inflation is the rise in the cost of goods and services over time. 

While inflation happens most of the time in Singapore, negative inflation, or deflation, can
happen too when the general level of prices fall.

According to the Monetary Authority of Singapore (MAS), low and stable inflation is thought
to be a core component for long-term sustainable economic growth. The MAS also states that
extreme rates of inflation, whether too high or too low, are unfavourable for the economy. 

INFLATION RATE OF LAST 10 YEARS

Inflation as measured by the consumer price index reflects the annual percentage change in the
cost to the average consumer of acquiring a basket of goods and services that may be fixed or
changed at specified intervals, such as yearly. 

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 Singapore Inflation Rate - Historical Data
Year Inflation Rate (%) Annual Change
2021 2.30% 2.49%
2020 -0.18% -0.75%
2019 0.57% 0.13%
2018 0.44% -0.14%
2017 0.58% 1.11%
2016 -0.53% -0.01%
2015 -0.52% -1.55%
2014 1.03% -1.33%
2013 2.36% -2.22%
2012 4.58% -0.67%

Source: World Bank

2 Ways to Measure Inflation in Singapore

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1) CPI All-Items (headline or overall inflation)

2) MAS Core Inflation (core inflation)

What’s the difference between headline inflation and core inflation?  

Basically, the CPI All-Items factors in all 10 categories, and the MAS Core Inflation is the CPI
All-Items excluding the components of “Accommodation” and “Private Transport”, which
belong to the main categories of “Housing & Utilities” and “Transport”, respectively. 

The reason why those two components are excluded from the MAS Core Inflation is because
they go through short-term fluctuations and don’t form the everyday expenses of most
households in Singapore. 

In short, while both the headline and core inflation measures can diverge (move away) in the
short run, they tend to converge (move together) in the long run.

Here’s the formula to calculate the yearly inflation rate:

Inflation Rate = ((CPI of current year) – (CPI of previous year)) / (CPI of previous year) * 100

What Is the Consumer Price Index (CPI)?

A key indicator of inflation is the Consumer Price Index (CPI), which measures the change in
prices over time of a fixed basket of goods and services typically consumed by resident
households. 

The CPI data are compiled by the Statistics. There are 10 main categories that are tracked: 

1. Food
2. Transport
3. Clothing & Footwear
4. Communication 
5. Housing & Utilities
6. Recreation & Culture
7. Household Durables & Services
8. Education
9. Healthcare
10. Miscellaneous Goods & Services

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INTEREST RATE

The benchmark interest rate in Singapore was last recorded at 3.36 percent from 2022 to Jan
2023
The Monetary Authority of Singapore does not control the monetary system by monitoring
interest rates. Instead, it manages the Singapore dollar (SGD) exchange rate against a trade-
weighted basket of currencies of Singapore's major trading partners and competitors.

FOREIGN EXCHANGE RESERVES

Foreign exchange reserves in Singapore declined to SGD 388.3 billion in December of 2022
from SGD 399.1 billion in the prior month, mainly due to a decrease in gold and foreign
exchange (SGD 377.7 billion vs SGD 388.5 billion in November). In December of 2021, the
reserves stood at SGD 563.3 billion.

TAXATION SYSTEM

Taxes for Nation Building

Taxes are used to develop Singapore into a stronger community, a better environment, and a
more vibrant economy, a place that Singaporeans can be proud to call home.

Taxes go towards the funding of government expenditure. In FY2021/22, the largest sector
making up 55.1% of total Government Operating Expenditure is the Social Development
Sector. The Security & External Relations Sector (which includes expenditure in areas such as
Defence; Home Affairs; and Foreign Affairs) takes up the second-largest share (27.8%) of total
operating expenditure. The Economic Development Sector and Government Administration
sectors make up 13.6% and 3.5% of government operating expenditure respectively.

Source: Economic Survey of Singapore, Second Quarter 2022

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 INDIA- SINGAPORE RELATIONSHIP

India and Singapore share long-standing cultural, commercial and strategic relations, with
Singapore being a part of the "Greater India" cultural and commercial region. More than
500,000 people of Indian origin live in Singapore. Singapore had always been an important
strategic trading post, giving India trade access to the Far East. Singapore was one of the first
to respond to India's "Look East" Policy of expanding its economic, cultural and strategic ties
in Southeast Asia to strengthen its standing as a regional power.

Significance of Singapore for India

 India-Singapore has a wide-ranging relationship that is as strategic as well as

economic.
 Singapore is an important investment source as well as a destination for Indians.
Singapore was the first country with which India signed a Comprehensive
Economic Cooperation Agreement, which is currently being upgraded. Singapore
has established strong ties with Indian states such as West Bengal, Rajasthan,
Andhra Pradesh, and Telangana. As a result, economic cooperation is growing.
 Both countries are seeking to explore other areas such as tourism and skill
development.
 Singapore is also an essential partner in many areas of India’s development
priorities, including smart cities, urban solutions, the financial sector, skills
development, ports, logistics, aviation, and industrial parks.

CULTURAL RELATION- There is a place in Singapore called “Little India” which

shows the best of Singapore’s Indian community from vibrant culture to incredible shopping.
There are a lot’s of Hindu, Chinese temples, Mosques and Churches. There is also a huge
availability of North and South Indian food. The streets of Little India is fully decorated while
Festivals of Diwali and Pongal.

STRATEGIC RELATIONS- Strong connection of Strategic Partnership raised during

Prime Minister Modi’s November 2015 visit, when he signed a “Joint Declaration on a
Strategic Partnership” with Singapore Prime Minister Lee Hsien Loong to commemorate the
50th anniversary of diplomatic relations.

The 5-S Plank- EAM’s (External Asset Managers) visit to Singapore in August 2014 resulted
in adopting the “5-S Plank,” which designates five areas of collaboration to strengthen bilateral
ties. The relationship is directed at the 5S Plank.

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  Scale up Trade & Investment.
 Speed up Connectivity.
 Smart Cities and Urban Rejuvenation.
 Skill development.
 State focus.

Defence Cooperation- An overall framework for bilateral defence cooperation is provided

by the Defence Cooperation Agreement (DCA), which was signed in October 2003 and the
improved DCA, which was signed during PM Modi’s visit in November 2015.

SIMBEX is a series of naval exercises between the Indian Navy and the Navies of the Republic
of Singapore. The 25th SIMBEX “Singapore-India Maritime Bilateral Exercise” had taken
place from the 10th to the 21st of November 2018 off the coasts of the Bay of Bengal and the
Arabian Sea.

Both countries successfully completed the 27th edition of the Singapore-India Maritime
Bilateral Exercise (SIMBEX) in November 2020, as well as the second edition of the
Singapore-India-Thailand Maritime Exercise (SITMEX).

Singapore’s role in enhancing India’s tie with ASEAN- India is an important

economic partner for Singapore. Economic engagement is anchored by the Comprehensive
Economic Cooperation Agreement CECA, which came into effect in June 2005. In 2017,
Singapore was India’s 5th largest trading partner worldwide, and the 3rd largest trading partner
in ASEAN.
Singapore was also India’s top source of Foreign Direct Investment (FDI) in FY2019/20.
In the international arena, India has a close working relationship with Singapore, and a number
of regional mechanisms connect these two countries together, including ASEAN, the ASEAN
Regional Forum (ARF), ASEAN plus three, the East Asia Summit, and the ASEAN Defence
Ministers Meeting (ADMM) Plus. Singapore has vigorously backed India’s expanded
geostrategic influence in ASEAN, as well as India’s permanent membership in the United
Nations Security Council.

Science & Technology Cooperation

 ISRO launched Singapore’s indigenously built micro-satellites since 2011.

 MOUs have been signed in areas of artificial intelligence, machine learning,
cognitive computing and big data analytics to improve healthcare, cybersecurity,
automation, mobility, smart energy systems and e-governance

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COMMERCIAL RELATION

Trade, Economic and Development Cooperation

 Singapore is India’s leading source of Foreign Direct Investment, among the largest
sources of External Commercial Borrowings and Foreign Portfolio Investment
 Bilateral trade expanded after the conclusion of CECA from USD 6.7 billion in
FY 2004-05 to USD 27.85 billion in 2018-19.
 In the fiscal 2019-20, total inflow until September 2019 was USD 8.01 billion
while Cumulative FDI from Singapore into India (April 2000- September 2019)
is USD 91.02 billion, accounting for 20% of total inflows into India
 About 9000 Indian companies are registered in Singapore. 6 PSUs, 9 banks, India
Tourism, CII, FICCI, Air India, Jet Airways have their offices in Singapore.
More than 440 companies from Singapore are registered in India.
 Singapore is now directly connected to 15 Indian cities by 8 airlines with more
than 500 weekly flights both ways.
 India the third largest source in tourism for Singapore.
 Singaporean companies continue to participate in a number of  smart city, urban
planning, logistics and infrastructure projects. Singapore is working with
Rajasthan, Himachal Pradesh and Maharashtra in preparing Master Plans for
townships.
 Singapore is working with the Central and state Governments as well as
Government organisations to establish skill development centres in various
sectors
 FinTech & Innovation: Cooperation in the areas of technology, innovation,
fintech and start-ups have grown. In 2019. A Pilot demo of BHIM UPI QR based
payments was launched in Singapore on 13 November during the 2019 Fintech
Festival

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BIBILOGRAPHY
References
CLEARIAS. (2022, october 29). India-Singapore Relations: Everything You Need to Know. Retrieved from
Foreign Relations Notes: https://www.clearias.com/india-singapore/

Import/Export Procedures in Singapore: A Guide. (2021, May 25). Retrieved from Tazapay:
https://tazapay.com/blog/import-export-procedures-in-singapore/

Singapore, M. A. (2022, november 15). MAS. Retrieved from Monetary Authority of Singapore:
https://www.mas.gov.sg/monetary-policy/sora#

Singapore’s Top 10 Trading Partner. (n.d.). Retrieved from Export Genius:

https://www.exportgenius.in/blog/singapore-top-10-trading-partners-singapore-import-
export-data-480.php

Trends, M. (n.d.). Singapore GDP 1960-2023. Retrieved from Macro Trends:

https://www.macrotrends.net/countries/SGP/singapore/gdp-gross-domestic-product

Trends, M. (n.d.). Singapore GDP 1960-2023. Retrieved from Macro Trends:

https://www.macrotrends.net/countries/SGP/singapore/gdp-gross-domestic-product

Singapore Unemployed Persons. (2023, February ). Retrieved from TRADING ECONOMICS:

https://tradingeconomics.com/singapore/unemployed-persons

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THANK YOU

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