Singapore is a high-income economy with a gross national income of US$52,600 per capita, as of 2017. The country provides one of the world’s most business-friendly regulatory environment for local entrepreneurs and is ranked among the world’s most competitive economies.
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.
After rapid industrialization in the 1960s catapulted the island nation’s development trajectory, manufacturing became the main driver of growth. In the early 1970s, Singapore reached full employment and joined the ranks of Hong Kong, South Korea and Taiwan a decade later as Asia’s newly industrializing countries. The manufacturing and services sectors remain the twin pillars of Singapore’s high value-added economy.
Fluctuations in the global economy have slowed down economic expansion to 2% in 2016; overall growth recovered to 3.6% in 2017. Value-added manufacturing, particularly in the electronics and precision engineering sectors, remain key drivers of growth, as are the services sector, particularly the transport and storage industries, which grew 5.3% year-on-year, and the finance and insurance industries, which grew 6.3% year-on-year. Economic growth is expected to moderate in 2018, with the government forecasting a range of 1.5% to 3.5%, projecting the rate to be slightly above the middle of the forecast range.
In 2017, Singapore launched this regional finance hub as ‘Asia’s Infrastructure Exchange’: “the go-to place where infrastructure demand and supply can connect, where infrastructure expertise and financing can be obtained and infrastructure needs are met”. In its announcement, the government highlights the country’s strong ecosystem, one that integrates infrastructure players along the whole value chain – multilateral banks, private financiers, lawyers, accountants, engineers and other professional services. The initiative, which will include the establishment of an Infrastructure Office, Infrastructure Asia, also presents the World Bank Group Singapore Hub as an important partner for the country - and the partnership strives to mobilize more financing for the delivery of sustainable and inclusive infrastructure.
Another growth area: value-creating industries and jobs, where new products and services are created from Singapore. With strong financial support from the government, the Skillsfuture initiative aims to strengthen the nimbleness and flexibility of the workforce by providing continuing education that deepens technical and managerial skills across sectors. Government spending on continuing education will nearly double, to more than S$1 billion yearly.
Last Updated: Oct 10, 2018