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Singapore
United Kingdom
Singapore is a high-income economy, known for its excellent finances and a high degree of openness. Being one of the most competitive economies worldwide, Singapore is well known for providing one of the most business-friendly environments globally.
Since achieving independence in 1965, Singapore transformed itself from a small domestic market economy with high unemployment and poverty levels to a highly developed, free-market economy, through decades of industrialisation.
The city-state is highly urbanised, with a population of 5.66 million. English is one of Singapore’s official languages and is the most spoken language, particularly in business.
The country’s GDP growth is driven mainly by exports and domestic demand. Singapore’s GDP went down by 4.1% in 2020 amidst the coronavirus pandemic. However, as more vaccines became available, and activity picked up, the economy expanded by 7.6% in 2021, the highest rate in a decade since 2010 recorded full-year expansion of 14.5%. However, growth is slowing since then: Singapore’s economic growth declined to 3.6% in 2022 and 1.2% in 2023. Looking ahead, the IMF expects Singapore’s GDP to expand by 2.1% in 2024.
The country’s GDP per capita is among the highest in the region and globally. In 2023, it stood at $87,880. For 2024, the country’s GDP per capita is expected to touch $91,730.
Singapore GDP Annual Growth Rate (in %)
Unemployment still exists but at a very low rate attributed to changes in the economy’s structure such as outsourcing low-skilled jobs. In 2019, Singapore’s unemployment rate was at 2.3%, and climbed to 3.0% during the pandemic. Since then, the rate has come down to 2.7% in 2021 and 2.1% in 2022. The rate fell further to 1.8%, as of October 2023.
Singapore Unemployment Rate (in %)
Currency and central bank
The Singapore dollar or SGD is the country’s official currency and is divided into 100 cents. It is often represented with the dollar sign ($) or S$ to distinguish itself from other dollar currencies. Banknotes and coins are issued by its central bank, the Monetary Authority of Singapore (MAS).
In terms of value, the Singapore dollar ranks 11th as the most traded currency worldwide as of 2021 and is considered one of the strongest values in the Asia-Pacific region. Aside from serving as the central bank, the MAS, currently headed by its chairman Tharman Shanmugaratnam, also functions as the country’s financial regulatory authority.
Inflation in Singapore has been on the rise since 2021, registering 2.3% that year and 6.1% in 2022. In 2023, inflation started to decline, standing at 5.5% in October.
The IMF projects a further decline in Singapore’s inflation for the current year, projecting it to reach 3.5%.
Singapore Inflation (in %)
Industry and Trade
The main sectors of Singapore’s economy are industry, services, and agriculture. However, agriculture’s contribution to GDP is almost non-existent, and it provides only 0.03% of jobs to the workforce.
As a highly industrialized economy, the country’s industrial sector comprises 24.16% of the GDP and provides work for around 14.0% of the working population in 2021. Among the country’s leading industries are electronics, petrochemicals, biomedical sciences, logistics, and transport engineering.
Meanwhile, its service sector has the most significant GDP contribution at 70.85% and employs over 85.0% of Singapore’s workforce. Trade, business services, transportation, communications, and financial services are the country’s biggest service categories.
Singapore’s economy is currently ranked 16th in terms of total exports, with machinery and equipment, petroleum, chemical products, miscellaneous manufactured articles and oil bunkers as its main export products. Its top export partners are China, Hong Kong, Malaysia, the US, Indonesia and Japan.
Meanwhile, the country is 16th in total imports and its top import products are electrical machinery and equipment, mineral fuels including oil, machinery including computers, gems and precious metals. China, Malaysia, the US, Taiwan, and South Korea are its main import partners.
Singapore Balance of Trade
Stock Exchanges and Capital Markets
The Singapore Exchange or SGX remains the sole stock exchange in the country. It is a multi-asset exchange that operates equity, fixed income and derivatives markets, and provides listing, trading, clearing, settlement, depository, and data services. It is the largest stock market exchange in Southeast Asia. As of October 2022, the market capitalization of SGX stood at $561 bn with more than 770 listed companies at current.
The SGX uses the FTSE Straits Times Index or STI as its benchmark index. The STI is a capitalisation-weighted stock market index that tracks the performance of the top 30 companies listed on the SGX.
Around 40% of the companies listed on the SGX are based outside the country, and it promotes itself as an offshore market for equity index derivatives, covering major Asian economies with the highest liquidity worldwide.
Along with London, New York, and Tokyo, Singapore is consistently listed as one of the world’s most active trading centres.
Bond Market
Singapore’s bond market continues to attract both local and foreign investors. Recognised as one of the most developed markets in Asia, the country is one of the few nations with a AAA credit rating from major rating agencies.
Singapore Government Securities (SGS) are debt securities issued by the country’s government. There are four types of SGS, namely Treasury Bills or T-bills, SGS Bonds, Singapore Savings Bonds (SSBs), and Cash Management Treasury Bills (CMTBs).
According to the MAS, SGS Bonds and T-bills are issued primarily to build market liquidity and provide a strong government yield curve, to expand an active secondary market for cash transactions and derivatives to achieve risk management efficiency, and to encourage domestic and international issuers and investors to participate in the country’s bond market.
Real Estate Market
Despite the effects of the Covid-19 pandemic, Singapore’s real estate market remained resilient. Property prices in the country continued to ascend from 2021 to 2022. However, between April and June 2023, the country’s real estate sector saw its first decline in prices in three years.
Despite this, the overall year of 2023 witnessed an approximately 12% increase in the price per square foot for private non-landed private property. During the same period, transaction volumes for private non-landed private property experienced a 14.4% decrease compared to the corresponding period in the previous year.
In a note released in November 2023, Morgan Stanley predicts the conclusion of upswing in private home prices within Singapore’s real estate sector soon. The anticipated downturn is projected to involve a 3% decline, with the cooldown expected to persist for up to two years.
Separately, as per Mordor Intelligence, Singapore’s real estate market, which is worth $46.58 bn currently, is expected to grow at a CAGR of 6.57% to $64.04 bn by 2029.
“The extended low-interest-rate environment will increase the attractiveness of commercial real estate in Singapore, especially those that can provide stable returns,” says the intelligence firm.
Singapore Housing Index (in %)
Source of charts: tradingeconomics.com
