Prosperous time for city state
Economy predicted to grow despite uncertainty in nations it relies on.
Singapore's economic strength is widely considered a yardstick for the health of the world economy because of the city state's reliance on global demand. Political stability plays a key role in ensuring economic well-being and, despite global uncertainty and a slowdown in China, the Singapore government is confident of achieving overall growth in 2013 of between 1 per cent and 3 per cent.
In July, the government released advanced estimates that the Singapore economy had grown 3.7 per cent in the second quarter of 2013 compared to a year earlier - its fastest pace of growth in almost two years.
Prime Minister Lee Hsien Loong has said that stability in government, which Singapore has successfully managed to achieve in its 50 years of independence, is crucial to economic prosperity.
"It starts with politics, because if your politics are wrong, then your economics are bound to go wrong," Lee said during a dialogue session at the DBS Asian Insights Conference in July. "And the reason why so many countries cannot get the economies right is because if the politics don't work, the benefits don't get spread to the right people or broadly enough, or there are vested interests which have to be taken care of, or there's some divide in the society which cannot be bridged, and you spend your time fighting over that, rather than working together productively.
"And I think we've got to be able to get the fundamentals right, and so far we have been able to do so. And if we can continue to get the politics right, then I think the economics can work out."
Not since the third quarter of 2011 has the Singapore economy grown so fast, thanks mainly to a recovery in the wholesale and retail trade sector, and the transport and storage sector. First-quarter growth was 0.2 per cent. Although analysts expect the city state to be hit by a slowdown in China, many maintain that growth will be in line with government expectations.
Manufacturing grew at 1.1 per cent in the second quarter, making a significant rebound after contracting 6.9 per cent in the previous quarter, while construction slowed to 5.6 per cent from 6.8 per cent. Service industries grew 5 per cent, highlighting its importance to Singapore after the opening of two casino-resorts.