Steady as she grows: Singapore on course for modest economic growth this year, despite global shocks
The city state has one of the world’s most liberal, pro-business economies in the world, and is thriving in many sectors, while continuing to invest in the development of others
Despite the ebb and flow of the global economy this year, Singapore could well be described as “sitting pretty”.
This tiny city state covers just over 700 square kilometres and has a population of 5.5 million – but its scoops the entrepôt jackpot.
Its list of firsts and premier rankings is lengthy and varied, being recognised as one of the world’s most liberal economies, little tainted by corruption, pro-business, with low taxes, and one of the globe’s highest per-capita GDPs. Singapore is the world’s second-busiest container port, ranking behind Shanghai, and it remains a thriving hub for all manner of business and commerce.
Despite such a solid financial background, Singapore has been buffeted by shocks in other parts of the world.
Singapore’s economic growth is expected to remain modest, according the Monetary Authority of Singapore (MAS), although the 1 to 3 per cent forecast for this year is under review.
MAS managing director Ravi Menon says: “The current stance of monetary policy remains appropriate for overall economic conditions. Unless there is a marked deterioration in the global economy, or a significant shift to the inflation outlook, there is no need to change the [present] monetary policy.”
With the government maintaining a steady course, Singapore’s main industries are concentrating on their core competencies. It’s worthy of note that many government-linked companies play a significant part in the city state’s economy as they are owned by the sovereign wealth fund Temasek Holdings, which has acquired majority stakes in such players as Singapore Airlines, SingTel, ST Engineering and MediaCorp.
In general, the most recent statistics indicate that Singapore is enjoying a reasonably respectable bill of financial health. GDP for the last quarter of 2015 was reported to be S$101.989 billion (HK$590 billion), while foreign reserves stood at S$350.998 billion. Total trade as of March was logged at S$71.160 billion, and total manufacturing output reached S$282.978 billion, while foreign investments amounted to S$10.436 billion. Singapore’s import and export business has benefited vastly from its wide-ranging network of trade agreements, allowing it free access to the whole of the Asean network, with import duty reduced when dealing with Indonesia, Malaysia, the Philippines, Thailand, Brunei, Burma, Cambodia, Laos and Vietnam.
One of the major pillars supporting the Singapore economy is the banking and finance industry. Rightly considered a global financial hub, the city’s banks – which include HSBC, Standard Chartered, Bank of America and Citibank, and home-grown operations such as OCBC and United Overseas Bank – provide top-notch corporate bank account facilities.
In parallel with banking, Singapore is promoting and developing its biotechnology industry with verve. Substantial sums have been invested into the sector, while leading companies such as GlaxoSmithKline, Pfizer, and Merck have all set up plants in Singapore.
Significantly, Singapore remains Asia’s pricing centre and leading oil hub. Singapore is one of the top export refining centres in the world, and last year its oil exports were valued at S$59 billion.