Economy of Singapore

The following table shows the main economic indicators in 1980–2021 (with IMF staff estimates in 2022–2027). Inflation below 5% is in green.[53]

Year	GDP (in Bil. US$PPP)	GDP per capita (in US$ PPP)	GDP (in Bil. US$nominal)	GDP per capita (in US$ nominal)	GDP growth (real)	Inflation rate (in Percent)	Unemployment (in Percent)	Government debt (in % of GDP)
1980	22.9	9,479.4	12.1	5,005.0	10.1%	8.5%	5.8%	n/a
1981	27.8	10,958.8	14.4	5,672.1	10.8%	8.2%	5.9%	n/a
1982	31.6	11,927.3	15.9	6,000.0	7.1%	3.9%	6.3%	n/a
1983	35.6	13,281.0	18.0	6,717.8	8.6%	1.0%	5.6%	n/a
1984	40.1	14,689.9	19.6	7,160.3	8.8%	2.6%	6.1%	n/a
1985	41.1	15,039.4	18.6	6,788.4	-0.6%	0.5%	4.6%	n/a
1986	42.5	15,563.0	18.8	6,870.8	1.3%	-1.4%	2.0%	n/a
1987	48.3	17,406.2	21.6	7,794.7	10.8%	0.5%	3.9%	n/a
1988	55.6	19,547.3	26.6	9,329.0	11.3%	1.5%	2.6%	n/a
1989	63.7	21,730.1	31.4	10,725.7	10.2%	2.3%	1.8%	n/a
1990	72.6	23,812.9	38.9	12,763.3	9.8%	3.5%	1.8%	73.5%
1991	80.0	25,528.0	45.5	14,502.0	6.7%	3.4%	1.8%	76.4%
1992	87.3	27,019.3	52.1	16,136.2	6.6%	2.2%	1.8%	79.0%
1993	99.6	30,059.3	60.6	18,290.1	11.5%	2.3%	1.7%	71.2%
1994	113.0	33,054.6	73.7	21,552.4	11.1%	3.1%	1.7%	70.7%
1995	123.7	35,087.0	87.8	24,914.9	7.2%	1.7%	1.8%	69.8%
1996	135.3	36,869.6	96.3	26,232.9	7.5%	1.4%	1.7%	71.3%
1997	149.1	39,283.1	100.1	26,375.9	8.3%	2.0%	1.4%	70.8%
1998	147.5	37,557.0	85.7	21,829.3	-2.2%	-0.3%	2.5%	84.6%
1999	158.1	39,943.7	86.3	21,796.6	5.7%	0.0%	2.8%	85.3%
2000	176.3	43,775.8	96.1	23,852.8	9.0%	1.3%	2.7%	82.3%
2001	178.4	43,104.2	89.8	21,699.7	-1.1%	1.0%	2.7%	94.5%
2002	188.3	45,080.2	92.5	22,159.8	3.9%	-0.4%	3.6%	96.3%
2003	200.7	48,774.7	97.6	23,730.4	4.5%	0.5%	4.0%	99.1%
2004	226.6	54,377.3	115.0	27,608.1	9.9%	1.7%	3.4%	95.7%
2005	250.9	58,815.0	127.8	29,961.3	7.4%	0.5%	3.1%	92.7%
2006	281.9	64,054.4	148.6	33,768.4	9.0%	1.0%	2.7%	86.5%
2007	315.7	68,793.8	180.9	39,432.9	9.0%	2.1%	2.1%	87.8%
2008	327.7	67,718.3	193.6	40,008.6	1.9%	6.6%	2.2%	97.9%
2009	330.2	66,212.2	194.2	38,926.8	0.1%	0.6%	3.0%	101.7%
2010	382.7	75,389.8	239.8	47,236.7	14.5%	2.8%	2.2%	98.7%
2011	415.0	80,052.4	279.4	53,891.5	6.2%	5.2%	2.0%	103.1%
2012	436.0	82,065.0	295.1	55,547.5	4.4%	4.6%	2.0%	106.7%
2013	448.1	83,001.8	307.6	56,967.4	4.8%	2.4%	1.9%	98.2%
2014	461.8	84,423.2	314.9	57,564.8	3.9%	1.0%	2.0%	97.7%
2015	481.4	86,974.7	308.0	55,645.6	3.0%	-0.5%	1.9%	102.2%
2016	501.5	89,436.6	318.8	56,858.5	3.6%	-0.5%	2.1%	106.6%
2017	534.9	95,310.3	343.2	61,149.6	4.7%	0.6%	2.2%	107.7%
2018	567.7	100,686.1	377.0	66,857.3	3.7%	0.4%	2.1%	109.4%
2019	584.2	102,431.4	375.5	65,833.2	1.1%	0.6%	2.3%	128.2%
2020	566.8	99,681.2	345.3	60,727.6	-4.1%	-0.2%	3.0%	152.0%
2021	635.3	116,486.3	397.0	72,794.9	7.6%	2.3%	2.7%	159.9%
2022	701.0	131,425.7	423.6	79,426.1	3.0%	5.5%	2.1%	141.1%
2023	742.3	140,280.1	447.2	84,500.4	2.3%	3.0%	2.1%	140.0%
2024	777.8	147,117.9	470.1	88,926.0	2.6%	2.0%	2.1%	139.9%
2025	811.9	152,667.0	491.2	92,363.0	2.5%	1.5%	2.1%	140.6%
2026	848.2	158,689.4	513.5	96,065.7	2.5%	1.5%	2.1%	141.2%
2027	886.1	164,987.2	536.8	99,935.1	2.5%	1.5%	2.1%	141.8%

Singapore's State Owned Enterprises as a percent of GDP

The public sector is used both as an investor and as a catalyst for economic development and innovation. The government of Singapore has two sovereign wealth funds, Temasek Holdings and GIC Private Limited, which are used to manage the country's reserves.[85] Initially the state's role was oriented more toward managing industries for economic development, but in recent decades the objectives of Singapore's sovereign wealth funds have shifted to a commercial basis.[86]

Government-linked corporations play a substantial role in Singapore's domestic economy. As of November 2011, the top six Singapore-listed GLCs accounted for about 17 percent of total capitalization of the Singapore Exchange (SGX). These fully and partially state-owned enterprises operate on a commercial basis and are granted no competitive advantage over privately owned enterprises. State ownership is prominent in strategic sectors of the economy, including telecommunications, media, public transportation, defence, port, airport operations as well as banking, shipping, airline, infrastructure and real estate.[86]

As of 2014, Temasek holds S$69 billion of assets in Singapore, accounting for 7% of the total capitalization of Singapore-listed companies.[87][88] In 2017, GSK shifted its Asian Headquarters to Singapore.[89]

All figures in billions of Singapore dollars.

To maintain its competitive position despite rising wages, the government seeks to promote higher value-added activities in the manufacturing and services sectors. It also has opened, or is in the process of opening, the financial services, telecommunications, and power generation and retailing sectors up to foreign service providers and greater competition. The government has also attempted some measures including wage restraint measures and release of unused buildings in an effort to control rising commercial rents with the view to lowering the cost of doing business in Singapore when central business district office rents tripled in 2006.

Singaporean exports in 2006

Singapore's total trade in 2014 amounted to S$982 billion. Despite its small size, Singapore is currently the fifteenth-largest trading partner of the United States.[104] In 2014, Singapore's imports totaled $464 billion, and exports totalled $519 billion. Malaysia was Singapore's main import source, as well as its largest export market, absorbing 18% of Singapore's exports, with the United States close behind. However, it is worth noting that there were efforts by some vegetable suppliers from Malaysia to try and smuggle food in if they do not meet food safety standards.[105]

Malaysia is Singapore's biggest trading partner, with bilateral trade totalling roughly 91 billion US dollars in 2012, accounting for over a fifth of total trade within ASEAN. Singapore's trade with major trading partners such as Malaysia, China, Indonesia and South Korea increased in 2012, while trade with EU27, United States, Hong Kong and Japan decreased in 2012. Since 2009, the value of exports exceeds imports for Singapore's trade with China. In comparison, the value of imports exceeds exports for Singapore's trade with the US since 2006.[106][107]

Re-exports accounted for 43% of Singapore's total sales to other countries in 2000. Singapore's principal exports are electronic components, refined petroleum, gold, computers, and packaged medications. Singapore's main imports are electronic components, refined petroleum, crude petroleum, gold, and computers.

Trade in Singapore has benefited from the extensive network of trade agreements Singapore has passed. According to Healy Consultants, Singapore has free trade access to the entirety of the ASEAN network, with import duty reduced when dealing with Indonesia, Malaysia, the Philippines, Thailand, Brunei, Burma, Cambodia, Laos and Vietnam.

The Singapore Economic Development Board (EDB) continues to attract investment funds on a large-scale for the country despite the city's relatively high-cost operating environment. The US leads in foreign investment, accounting for 40% of new commitments to the manufacturing sector in 2000. As of 1999, cumulative investment for manufacturing and services by American companies in Singapore reached approximately $20 billion (total assets). The bulk of US investment is in electronics manufacturing, oil refining and storage, and the chemical industry. More than 1,500 US firms operate in Singapore.

Singapore's largely corruption-free government, skilled workforce, and advanced and efficient infrastructure have attracted investments from more than 3,000 multinational corporations (MNCs) from the United States, Japan, and Europe. Foreign firms are found in almost all sectors of the economy. MNCs account for more than two-thirds of manufacturing output and direct export sales, although certain services sectors remain dominated by government-linked corporations.

The government also has encouraged firms to invest outside Singapore, with the country's total direct investments abroad reaching $39 billion by the end of 1998. The People's Republic of China was the top destination, accounting for 14% of total overseas investments, followed by Malaysia (10%), Hong Kong (9%), Indonesia (8%) and US (4%). The rapidly growing economy of India, especially the high technology sector, is becoming an expanding source of foreign investment for Singapore. The United States provides no bilateral aid to Singapore, but the US appears keen to improve bilateral trade and signed the US-Singapore Free Trade Agreement. Singapore corporate tax is 17 per cent.[108]

In 2000, Singapore had a workforce of about 2.2 million. With limited access to natural resources, Singapore had been forced to invest in its people. The country has the largest proficiency of English language speakers in Asia, making it an attractive place for multinational corporations. Singapore has come a long way from where it once stood. In the 1970s according to Tilak Abeysinghe "2.4 percent of the labor force were degree holders". By 1990 the number rose to just 6.3%. In 2013 the percentage of the labor force who held degrees reached 31%. The nation's directive toward high skilled labor jobs, has promoted both growth and education to the region.[110] The National Trades Union Congress (NTUC), the sole trade union federation, which has a symbiotic relationship with the ruling party, accounts for almost 99% of total organised labour. Government policy and pro-activity rather than labour legislation controls general labour and trade union matters.

The Employment Act offers little protection to white-collar workers due to an income threshold. The Industrial Arbitration Court handles labour-management disputes that cannot be resolved informally through the Ministry of Manpower. The Singapore Government has stressed the importance of co-operation between unions, management and government (tripartism), as well as the early resolution of disputes. There has been only one strike in the past 15 years.

Singapore has enjoyed virtually full employment for long periods of time. Amid an economic slump, the unemployment rate rose to 4.0% by the end of 2001, from 2.4% early in the year. Unemployment has since declined and as of 2012 the unemployment rate stands at 1.9%.[111]

While the Singapore government has taken a stance against minimum wage and unemployment benefit schemes, in 2007 the government introduced a Workfare Income Supplement (WIS) scheme to supplement wages of low-skilled workers.[112] To support employers in hiring older Singaporean workers, Special Employment Credit (SEC) was introduced in 2011. It was first enhanced in 2012 to provide employers with support in hiring older Singaporean workers and Persons with Disabilities (PWDs). It helped the employers to cope with costs associated with the increase in Central Provident Fund (CPF) contribution rates for older workers. The 5-year SEC scheme was further extended an additional 3 years, up to 2019 to encourage employers to voluntarily re-employ older workers aged 65 and above.[113] The Singapore Government and the NTUC have tried a range of programs to increase lagging productivity and boost the labour force participation rates of women and older workers. However, labour shortages persist in the service sector and in many low-skilled positions in the construction and electronics industries. Foreign workers help make up this shortfall. In 2000, there were about 600,000 foreign workers in Singapore, constituting 27% of the total work force. As a result, wages are relatively suppressed or do not rise for all workers. To have some controls, the government imposes a foreign worker levy payable by employers for low end workers like domestic help and construction workers.[114] In 2012, the Ministry of Trade and Industry (MTI) reported that Singapore should continue to fine-tune the calibration of its inflow of foreigners as the country continues to face an ageing population and a shrinking workforce. Singapore Parliament accepted the recommendations by its Economic Strategies Committee (ESC) for the optimal ratio of the level of immigration and foreign manpower for both high and low skilled workers.[115] The Government recognises that the current overall foreign workforce should complement the local resident workforce and not replace the Singaporean Core concept, and helps companies greatly as they raise productivity through business restructuring and workforce retraining; raise resident labour force participation rate.[116][117]

Singapore is one of the world's wealthiest countries per capita, but its Gini coefficient is high in comparison to developed countries. Statistics on income inequality are published by the Singapore Department of Statistics.[118] Without taking taxes and social transfers into account, Singapore's gini coefficient puts the country in the medium range. Nevertherless, the country remains on the "very high" category on the inequality-adjusted human development index (IHDI), a ranking similar to the Human Development Index (HDI), but with inequality also accounted for.[9]

In October 2018, Oxfam ranked Singapore 149 out of 157 in its Commitment to Reducing Inequality Index 2018, placing it among the bottom ten of the countries in the index, which ranks countries based on efforts to reduce economic inequality.[119] In its report, Oxfam accused Singapore of practices which encouraged "harmful tax practices", not having a universal minimum wage (apart from janitors and security guards), and poor performance on labour rights.[120] The government responded to the report by claiming that it was more important to look at "real outcomes" such as Singapore's high home ownership, health, education, and employment, rather than public spending or tax rates, also saying that the report "assumes that high taxation and high public expenditure reflects commitment to combating inequality".[119]

The government provides social support through a variety of social assistance schemes. The Ministry of Social and Family Development runs ComCare, a program which provides income support for low-income citizen households through various schemes for short-to-medium term assistance, long-term assistance, child support, and urgent financial needs.[121] The Community Development Councils also run various local assistance schemes within their districts.[122] The Ministry of Manpower runs a Silver Support Scheme which provides additional financial support for low-income elderly with no family support.[123] Meanwhile, the Ministry of Health also runs MediFund to assist families that have difficulty paying for medical bills despite government subsidies and other health financing schemes.[124] In addition, the National Council of Social Service coordinates a range of 450 non-government voluntary welfare organisations to provide social services, while raising funds through The Community Chest of Singapore.[125]

Today, low and middle-income groups now receive 2.5 times the public subsidies they did ten years ago.[126]

Government spending in Singapore has risen since the start of the global financial crisis, from around 15% of GDP in 2008 to 17% in 2012. The government's total expenditure as a percentage of GDP ranks among the lowest internationally and allows for a competitive tax regime.[127][128] Singapore is required under its constitution to keep a balanced budget over each term of government. Singapore government debt is issued for investment purposes, not to fund expenditure.[129][130][131]

Personal income taxes in Singapore range from 0% to 22% for incomes above S$320,000.[132] There are no capital gains or inheritance taxes in Singapore.[133][134] Singapore's corporate tax rate is 17% with exemptions and incentives for smaller businesses. Singapore has a single-tier corporate income tax system, which means there is no double-taxation for shareholders.[135]

Singapore introduced Goods and Services Tax (GST) with an initial rate of 3% on 1 April 1994, increasing government's revenue by S$1.6 billion (US$1b, €800m) and establishing government finances.[136] The taxable GST was increased to 4% in 2003, to 5% in 2004, and to 7% in 2007.[137]

The Singapore government owns two investment companies, GIC Private Limited and Temasek Holdings, which manage Singapore's reserves. Both operate as commercial investment holding companies independently of the Singapore government, but Prime Minister Lee Hsien Loong and his wife Ho Ching serve as chairman and CEO of these corporations respectively.[138][139][140] While GIC invests abroad, Temasek holds 31% of its portfolio in Singapore, holding majority stakes in several of the nation's largest companies, such as Singapore Airlines, Singtel, ST Engineering and Mediacorp.[87] As of 2014, Temasek holds S$69 billion of assets in Singapore, accounting for 7% of the total capitalisation of Singapore-listed companies.[87][88]

In April 2013, the country was recognised as an increasingly popular tax haven for the wealthy due to the low tax rate on personal income, a full tax exemption on income that is generated outside of Singapore and 69 double taxation treaties[91] that can minimise both withholding tax and capital gains tax. Australian millionaire retailer Brett Blundy, with an estimated personal wealth worth AU$835 million, and multi-billionaire Facebook co-founder Eduardo Saverin are two examples of wealthy individuals who have settled in Singapore (Blundy in 2013 and Saverin in 2012). Additionally, Australian mining magnate Gina Rinehart owns property in Singapore[141] and American investor Jim Rogers moved to Singapore in 2007—Rogers has identified the 21st century as an era in which Asia will dominate and wishes for his two daughters to learn Mandarin as a key outcome of the relocation.[142][143] Chinese Media TV celebrities Jet Li and Gong Li have also taken up naturalised Singapore citizenship.[144][145]

The Monetary Authority of Singapore (MAS) is Singapore's central bank and financial regulatory authority. Its current chairman is Lawrence Wong (July 2023–present).[146] It administers the various statutes pertaining to money, banking, insurance, securities and the financial sector in general, as well as currency issuance. The MAS has been given powers to act as a banker to and financial agent of the Government. It has also been entrusted to promote monetary stability, and credit and exchange policies conducive to the growth of the economy.

Unlike many other central banks such as Federal Reserve System, European Central Bank or Bank of England, MAS does not regulate the monetary system via interest rates to influence the liquidity in the system. Instead, it chooses to do it via the foreign exchange mechanism, which it has been doing since 1981. In doing so it manages the Singapore dollar versus a number of currencies that they do not reveal publicly – a Singapore dollar nominal effective exchange rate (S$ NEER). It carries this out by intervening in the SGD market as well as other operations in the money market.[147][148] The MAS reviews its policy stance less frequently than most central banks, in a cycle that is around every 6 months.[149] In some circumstances, such as during the COVID-19 pandemic MAS can change the date of its twice yearly meeting.[150]

In May 2022, six major banks agreed to pay $64.5 million to resolve antitrust allegations that they worked together to rig benchmark Singapore interest rates. The banks involved included Credit Suisse AG, Deutsche Bank AG, The Hongkong and Shanghai Banking Corporation Limited, ING Bank N.V., Citibank N.A. and JPMorgan Chase & Co.[151]

To dampen property speculation, the government imposed Additional Buyer's Stamp Duty (ABSD) starting in December 2011. It was subsequently raised in January 2013 and then again in July 2018. Currently for Singapore citizens buying their first property, there is no ABSD. For their second property onwards, they pay up to 15% ABSD. For foreigners the ABSD rate is 20% no matter if it is the first property. And for entities it is 25%.[167] At the same time they raised the ABSD in 2018, the MAS tightened rules on housing loans, by limiting the loan tenure and reducing the Loan-to-Value ratio.[168][169]

16,156 mergers and acquisitions deals have been conducted in Singapore so far, which accumulated to a total value of US$850 bil. Since 1985 there has been a constant upward trend, disrupted only in 2002 and 2009.[170] The most active year in terms of numbers (926) and value (US$78 bil.) has been 2017, so there is currently an all-time high. In general inbound and outbound deals in Singapore are nearly equally distributed.

Here is a list of the top 10 deals with Singaporean participation inbound or outbound:

Percentage of economic growth: 1.7% (2016)[171]

Industrial production growth rate: 1% (2016 est.)

Electricity – production by source:
fossil fuel: 95.3%
hydro: 0%
nuclear: 0%
other: 3.9% (2014 est.)

Electricity – consumption: 47.5 TWh (2016)

Electricity – exports: 0 kWh (2007)

Electricity – imports: 0 kWh (2007)

Agriculture – products: rubber, copra, fruit, vegetables; poultry, eggs, fish, orchids, ornamental fish

Currency: 1 Singapore dollar (S$ or SGD) = 100 cents

Exchange rates: [172]

• Four Asian Tigers
• 5 C's of Singapore
• Biopolis
• Dual economy
• Bamboo network
• Immigrant workers in Singapore
• Singapore Workplace Safety and Health Conference
• Singapore and the World Bank

Wikimedia Commons has media related to Economy of Singapore.

• Statistics Singapore
• Singapore Department of Statistics
• Monetary Authority of Singapore