Singapore Economic Forecast
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Singapore was the third fastest growing economy in the world in 2010 behind Qatar and Paraguay – with a real GDP growth rate (constant prices, national currency) of 14.471 percent. This was a strong response from the previous two years where the GDP growth rate had been relatively poor – 1.487 percent in 2008 and negative 0.77 percent in 2009 – in the aftermath of the 2008 global financial crisis.
Singapore was the third fastest growing economy in the world in 2010 behind Qatar and Paraguay – with a real GDP growth rate (constant prices, national currency) of 14.471 percent. This was a strong response from the previous two years where the GDP growth rate had been relatively poor – 1.487 percent in 2008 and negative 0.77 percent in 2009 – in the aftermath of the 2008 global financial crisis.
From 2011 onwards, Singapore’s GDP growth rate (constant prices, national currency) is expected to normalise between the ranges of 4.008 percent to 5.162 percent in the next five years. According to the Ministry of Trade and Industry (MTI) in Singapore, 2011 may see a higher GDP growth rate (constant prices, national currency) of 5 to 7 percent, with economic recovery among its economic partners likely to see a trickle down effect to Singapore.
As an export-oriented economy, any negative changes in the external environment may cause an adverse effect on Singapore’s economic growth. Hence, global economic issues such as the sovereign debt issues in Europe, further increases in global oil prices arising from the political turmoil in the Middle East and North Africa, and a prolonged disruption of industrial activities in Japan following the March disasters, could tamper with any future economic forecasts for Singapore.
Table of Contents
Singapore’s GDP Forecast
Singapore is the 40th largest economy in the world according to both GDP (current prices, US dollars) and GDP (PPP). In 2010, Singapore’s GDP (current prices, US dollars) was US$222.699 billion and its GDP (PPP) was US$291.937 billion.
Singapore’s GDP (PPP) grew by 15.56 percent from 2009 to 2010. This reflected the strong overall economic recovery from the 2008 global financial crisis where GDP (PPP) had only increased by 3.70 percent in 2008 and 0.14 percent in 2009. Prior to the financial crisis, the average GDP (PPP) growth rate from 2003 to 2007 was 11.268 percent. From 2011 to 2016, Singapore’s GDP (PPP) growth will fall between 5.75 to 6.42 percent. By the end of 2016, Singapore’s GDP (PPP) is expected to reach US$413.46 billion.
Singapore has the third highest GDP (PPP) per capita in the world. In 2010, Singapore’s GDP (PPP) per capita was US$56,521.73 – behind Qatar and Luxembourg. With the Singaporean government recently revaluing its currency upwards by 1.3 percent in order to contain imported inflation, Singaporeans are expected to be wealthier with its GDP (PPP) per capita increasing by 4.60 percent in 2011. From 2012 to 2016, Singapore’s GDP (PPP) per capita is expected to rise by 3.94 to 4.14 percent annually and reach US$72,178.82 by the end of 2016.
Singapore’s Unemployment Forecast
Singapore had one of the lowest unemployment rates among developed economies in the world for 2010 at 2.2 percent. Generally, Singapore enjoys fairly low unemployment rates although an economic slump caused unemployment rates to rise to 3.95 percent in 2003. During the recent financial crisis, unemployment rose to 3.025 percent in 2009 although this has fallen again.
Unemployment rates in Singapore is not expected to see any significant changes in the next few years – gradually improving from 2010’s 2.2 percent to 2.1 percent by the end of 2016.
Singapore’s Inflation Rate & Current Account Balance Forecast
Although Singapore generally enjoys fairly low inflation rates, higher costs in transport, housing and food have caused inflation rates to rise significantly between 2007 and 2010. From 2002 to 2006, Singapore’s average inflation rate (average consumer price change) was 0.6428 percent. However, 2007 to 2010 saw an average inflation rate (average consumer price change) of 3.03 percent, peaking at 6.612 percent in 2008.
In 2011, inflation (average consumer price change) in Singapore is expected to be hit 3.3 percent. The next five years should see inflation rates gradually decrease and reach 1.976 percent by 2016.
Singapore had the 8th largest current account balance in the world for 2010 at US$49.454 billion. In the aftermath of the 2008 global financial crisis, Singapore’s current account balance had fallen from US$48.478 billion in 2007 to US$27.618 billion in 2008. However, the current account balance has since returned to pre-financial crisis levels and is expected to remain at similar levels for the next five years. By 2016, Singapore’s current account balance is expected to be US$47.518 billion.
