THE WORLD S FIRST PUBLISHER OF COUNTRY REPORT PRESENTATIONS

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2 THE WORLD S FIRST PUBLISHER OF COUNTRY REPORT PRESENTATIONS Argentina Australia Brazil Brunei Cambodia Canada Chile China Hong Kong India Indonesia Laos Malaysia Mexico Myanmar New Zealand Peru Philippines Russia Singapore South Africa South Korea Taiwan Thailand Turkey Vietnam REGISTER and get our reports delivered to your mailbox

3 Charting Singapore s Economy, 1H 2016 Publication Date: December 8 th, 2015 Number of pages: 59 Attribution-NonCommercial-NoDerivatives 4.0 International (CC BY-NC-ND 4.0) You are free to: Share copy and redistribute the material in any medium or format Under the following terms: Attribution You must give appropriate credit, provide a link to the license, and indicate if changes were made. You may do so in any reasonable manner, but not in any way that suggests the licensor endorses you or your use. NonCommercial You may not use the material for commercial purposes. NoDerivatives If you remix, transform, or build upon the material, you may not distribute the modified material. No additional restrictions You may not apply legal terms or technological measures that legally restrict others from doing anything the license permits. ASK THE EDITOR Charting Economy team consists of editors, analysts, and researchers. For any questions and comments about this report, you can contact the chief editor directly at editor@chartingeconomy.com. DISCLAIMER The facts of this report are believed to be correct at the time of publication but cannot be guaranteed. Please note that the findings, conclusions and recommendations that Charting Economy delivers will be based on information gathered in good faith from both primary and secondary sources, whose accuracy we are not always in a position to guarantee. As such Charting Economy can accept no liability whatever for actions taken based on any information that may subsequently prove to be incorrect. About This Report This country-report presentation is designed to chart out the economic outlook of Singapore on a semi-annual basis. It is ideal for strategic management and corporate planning functions in companies operating or looking to get into the most advanced economy in ASEAN. Charting Economy CC BY-NC-ND 4.0 3

4 2016 RELEASE SCHEDULE Jan-16 Feb-16 Mar-16 Apr-16 May-16 Jun-16 India 1H16 Australia 1H16 Brunei 2H16 India 2H16 China 1H16 New Zealand 1H16 Myanmar 2H16 Indonesia 2H16 South Korea 1H16 Brazil 1H16 Cambodia 2H16 Thailand 2H16 Hong Kong 1H16 Canada 1H16 Laos 2H16 Malaysia 2H16 Taiwan 1H16 Mexico 1H16 Singapore 2H16 Russia 1H16 Philippines 2H16 Turkey 1H16 Vietnam 2H16 China 2H16 South Korea 2H16 Hong Kong 2H16 Taiwan 2H16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16 Australia 2H16 Brunei 1H17 India 1H17 New Zealand 2H16 Myanmar 1H17 Indonesia 1H17 Brazil 2H16 Cambodia 1H17 Thailand 1H17 Canada 2H16 Laos 1H17 Malaysia 1H17 Mexico 2H16 Singapore 1H17 Russia 2H16 Philippines 1H17 Turkey 2H16 Vietnam 1H17 Argentina 2H16 China 1H17 South Africa 2H16 South Korea 1H17 Peru 2H16 Hong Kong 1H17 Chile 2H16 Taiwan 1H17 4

5 Singapore Official name: Republic of Singapore Brief history Singapore was founded as a British trading colony in It joined the Malaysian Federation in 1963 but separated two years later and became independent. Singapore subsequently became one of the world's most prosperous countries with strong international trading links (its port is one of the world's busiest in terms of tonnage handled) and with per capita GDP equal to that of the leading nations of Western Europe. Geography Population and society Government Area: 697 sq km (#192 in the world) Land boundaries: Coastline 193 km Land use: arable land: 0.89% permanent crops: 0.14% other: 98.97% Irrigated land: N/A Freshwater withdrawal per capita: cu m/yr Natural resources: fish, deep water ports Population: 5,674,472 (July 2015 est., #114 in the world) Ethnic group (2013): Chinese 74.2%, Malay 13.3%, Indian 9.2%, other 3.3% Language (2010): Mandarin (official) 36.3%, English (official) 29.8%, Malay (official) 11.9%, Hokkien 8.1%, Tamil (official) 4.4%, Cantonese 4.1%, Teochew 3.2%, other Indian languages 1.2%, other Chinese dialects 1.1%, other 1.1% Religions (2010): Buddhist 33.9%, Muslim 14.3%, Taoist 11.3%, Catholic 7.1%, Hindu 5.2%, other Christian 11%, other 0.7%, none 16.4% (2010 est.) Working age population (15-64 yr): 78.0% Population growth rate: 1.89% (2015 est.) Government type: parliamentary republic Capital: Singapore Currency: Singapore Dollar (SGD) Chief of state: President Tony TAN Keng Yam Head of government: Prime Minister LEE Hsien Loong Cabinet: Cabinet appointed by the president on the advice of the prime minister; Cabinet responsible to Parliament Election: president elected by popular vote for six-year term (next to be held by August 2017) legislative election last held on 11 September 2015 (next to be held in 2020) General Information This section provides a snap shot and acts as a country fact sheet. Readers will find brief history as well as information on geography, population, society and government. Source: CIA World factbook Charting Economy CC BY-NC-ND 4.0 5

6 CONTENT SUMMARY ECONOMIC PROFILE ECONOMIC OUTLOOK Structure Competitiveness Development Growth Stability Singapore is the fourth largest economy in ASEAN with USD 308 billion GDP in 2014 In term of population, Singapore is the second smallest country in ASEAN with only 5.7 million people Unfavorable demographic structure for Singapore with relatively old population and declining working age group It has long been a trading (service) economy, with external demand far exceeding domestic one Singapore s economy relies on international trade much more than any other ASEAN economy Singapore s economy is service based with strong Manufacturing presence Economic Structure Part of the country s economic profile, economic structure section gives readers useful views to understand economic fundamental and determine what matters for the country s economy. Charting Economy CC BY-NC-ND 4.0 6

7 Singapore is the fourth largest economy in ASEAN with USD 308 billion GDP in GDP USD billion, Market Exchange Rate United States China Japan Germany United Kingdom France ASEAN Brazil Italy India Russia Canada Australia Korea Spain Mexico 4,602 3,874 2,950 2,834 2,518 2,347 2,148 2,051 1,861 1,785 1,443 1,410 1,407 1,291 10,357 17,348 Indonesia Thailand Malaysia Singapore Philippines Vietnam* Myanmar Brunei Cambodia* Laos* Note: (*) IMF Estimate Measuring the size of an economy Size of any economy is usually measured by calculating its Gross Domestic Product (GDP) which is the market value of all officially recognized final goods and services produced within a country in a given period of time. To compare GDP internationally, there is a need to convert value in local currencies to one main currency, normally USD. There are two popular exchange rate to be used. The first one is the official exchange rate for that particular period. The second one is the so called Purchasing Power Parity exchange rate, which takes into account the difference in living expenses between countries. The first method is more popular in comparing the size of each economy. Size of Singapore s economy Using the market exchange rate method, Singapore s GDP is around USD 308 billion in 2014, slightly lower than that of Malaysia. It is ranked as the fourth largest economy in ASEAN. Source: IMF World Economic Outlook Database Oct Charting Economy CC BY-NC-ND 4.0 7

8 In term of population, Singapore is the second smallest country in ASEAN with only 5.7 million people Population Million, July 2015 est. Population Growth Avg. Annual Rate of Change, Medium fertility, Indonesia Philippines Vietnam % 1.622% 0.771% Population Population compares estimates from the US Bureau of the Census based on statistics from population censuses, vital statistics registration systems, or sample surveys pertaining to the recent past and on assumptions about future trends. Thailand Myanmar Malaysia % 0.711% 1.391% Population growth projection Projected by UN s Population Division in World Population Prospects: 2012 Revision. There are many sets of assumptions in the projections and we show here the medium fertility scenario as a base case. Cambodia Laos Singapore Brunei % 1.722% 1.502% 1.158% Singapore s population Singapore s population is around 5.7 million people, the second lowest in ASEAN. The population growth in Singapore is projected to be quite high, at a rate of 1.502% per year over the next five years. Source: CIA World Fact book, UN s World Population Prospects: The 2012 Revision SE Asia avg % Charting Economy CC BY-NC-ND 4.0 8

9 Unfavorable demographic structure for Singapore with relatively old population and declining working age group Demographic Structure 2015, % of total population, Medium Fertility Working age Years, % of total population, Medium Fertility Male Female Demographic structure Total population (both sexes combined) by five-year age group % % % % % % % Demographic projection Projected by UN s Population Division in World Population Prospects: 2012 Revision. There are many sets of assumptions in the projections and we show here the medium fertility scenario as a base case. Singapore s demographic structure Singapore has quite a unfavorable demographic structure with relatively old population. The working age group (15-64) will continue to decline sharply over the next 30 years % 3% 1% 1% 3% 5% Source: UN s World Population Prospects: The 2012 Revision Charting Economy CC BY-NC-ND 4.0 9

10 Singapore has long been a trading (service) economy, with external demand far exceeding domestic one GDP COMPOSITION EXPENDITURE* , % of total C I G M X 300.0% 250.0% 200.0% 150.0% 100.0% 50.0% 0.0% -50.0% % % % % GDP COMPOSITION PRODUCTION , % of total Service Agriculture Industry % 70.0% 60.0% 50.0% 40.0% 30.0% 20.0% 10.0% 0.0% GDP composition GDP can be determined in three ways, all of which should, in principle, give the same result. They are the product (or output) approach, the income approach, and the expenditure approach. The expenditure approach is summarized in the formula: GDP = C (private consumption) + I (Investment) + G (public consumption) + X (export of goods and services) M (import of goods and services). The production approach measures market value of all final goods and services calculated during the period. It sums up value add of each production process to avoid double counting. The income approach sums total of incomes of individuals living in a country during the period. For analyzing GDP composition, the first two approaches are more popular. Singapore s GDP composition Singapore has long been a trading economy, with external demand far exceeding domestic one. Export of goods and services (X) accounts for almost 200% of 2014 GDP. On the production side, Service sector is the biggest one, accounting for more than 70% of GDP. Singapore has almost zero Agriculture sector. Note: (*) C = Private Consumption, I = Investment including: I (capital) = Capital formation and I (inventory) = change in inventory G = Public consumption, X = Export of goods and services, M = Import of goods and services Source: The World Bank Charting Economy CC BY-NC-ND

11 Singapore relies on international trade more than any other ASEAN economy TRADE OPENNESS Trade / GDP, 2014, % EXPORT IMPORT Singapore Vietnam Malaysia Cambodia Thailand Brunei Lao PDR Philippines Key partners 2014, % China Malaysia Hongkong Indonesia US Japan South Korea Taiwan Australia Thailand 5.9% 4.1% 4.1% 3.9% 3.8% 3.7% 12.6% 12.0% 11.0% 9.4% Key partners 2014, % China Malaysia US Taiwan South Korea Japan Indonesia UAE Saudi Arabia India 5.9% 5.5% 5.1% 4.2% 4.0% 2.3% 12.1% 10.7% 10.3% 8.2% Trade openness The trade-to-gdp ratio is frequently used to measure the importance of international transactions relative to domestic transactions. This indicator is calculated for each country as the simple average (i.e. the mean) of total trade (i.e. the sum of exports and imports of goods and services) relative to GDP. This ratio is often called the trade openness ratio. Trade openness level for Singapore Singapore relies on international trade more than any other ASEAN economy, with trade openness degree of 351% of GDP. Key trade partners include Malaysia, China, Hong Kong, US, South Korea, Japan, etc. Indonesia Myanmar Main export items machinery and equipment (including electronics and telecommunications), pharmaceuticals and other chemicals, refined petroleum products Main import items machinery and equipment, mineral fuels, chemicals, foodstuffs, consumer goods Source: The World Bank, ADB, CIA World Factbook Charting Economy CC BY-NC-ND

12 Singapore s economy is service based with strong Manufacturing presence KEY PRODUCTION SECTORS % of 2014 GDP (current price) 100% = 390,089 Million SGD 0% AGRICULTURE 29% INDUSTRY 71% SERVICE GDP composition, production side The production approach measures market value of all final goods and services calculated during the period. It sums up value add of each production process to avoid double counting. Main production sectors are Agriculture, Industry and Service. Within Industry, there are manufacturing, mining, utilities and construction. Within Service, there are trading, transport, hotel and restaurant, financial, public administration, education, real estate, health and social, other social and private household. Manufacturing 17.4% Taxes on Products 5.5% Construction 4.9% Utilities 1.3% Other Goods Industries 0.0% Trading 16.5% Business Services 14.9% Finance & Insurance 11.8% Other Services 10.9% Transportation & Storage 6.5% Ownership of Dwellings 4.4% ICT 3.8% Accommodation & Food 2.1% Key production sectors for Singapore Service accounts for over 70% of Singapore s economy while Industry accounts for the rest. Within Service sector, Trade is the largest subsector, accounting for 16.5% of 2014 GDP. Within Industry, Manufacturing is largest, accounting for 17.4% of GDP. From the figures, Singapore has no agriculture sector. Source: Department of Statistics, Singapore; Charting Economy analysis Charting Economy CC BY-NC-ND

13 CONTENT SUMMARY ECONOMIC PROFILE ECONOMIC OUTLOOK Structure Competitiveness Development Growth Stability Singapore s economy is in the final stage of development, competing by innovation and business sophistication Wages in Singapore is highest in ASEAN and comparable to advanced economies Despite low growth rate, Singapore s labor productivity is still higher than comparable countries Singapore is ranked 2nd in the latest global competitiveness rankings, second only to Switzerland Apart from Market size, competitiveness factors for Singapore are largely better than those of ASEAN neighbors Singapore is the easiest place to do business in the world, and still improving Restrictive labor regulations is by far the most problematic factor for doing business in Singapore In term of FDI, Singapore is on another level from other ASEAN countries and has recovered greatly from 2008 Nation Competitiveness Part of the country s economic profile, this section explores the country s competitiveness in the global level. It also covers the country s attractiveness to foreign direct investment. Charting Economy CC BY-NC-ND

14 Singapore s economy is in the final stage of development, competing by innovation and business sophistication STAGES OF DEVELOPMENT Characteristics Key Factors Stage 1: Factor-driven (35 economies) Mainly factor-driven Compete based on primarily low-skilled labor and natural resources Low productivity reflected in low wages 1. Public and Private institutions 2. Infrastructure 3. Macroeconomic environment 4. Health and primary education Transition from Stage 1 to Stage 2 (16 economies) Stage 2: Efficiency-driven (31 economies) Becomes more competitive Productivity will increase and wages will rise Compete by increasing efficiency in production process 5. Higher education and training 6. Goods market efficiency 7. Labor market efficiency 8. Financial market development 9. Technological readiness 10.Market size Transition from Stage 2 to Stage 3 (20 economies) Stage 3: Innovation-driven (38 economies) Wages will have risen by so much Must compete by producing new and different goods through new technologies or business models 11.Business sophistication 12.Innovation Stages of development According to an economic theory, there are three stages of development for any economy to compete in the global market. In the first stage, an economy mainly compete based on lowskilled labor and natural resources. This stage is called Factor-driven. In the second stage, the economy becomes more competitive, productivity will increase and wages will rise. It can compete by increasing efficiency in production process. This stage is called Efficiency-driven. In the last stage, wages will have risen by so much that the economy must compete by producing new and different goods through new technologies or business models. This stage is called Innovation-driven. Countries/economies are grouped into these stages of development in the Global Competitiveness report by the World Economic Forum. Examples Cambodia India Laos Myanmar Pakistan Bhutan Philippines Saudi Arabia Vietnam China Indonesia South Africa Thailand Ukraine Source: The Global Competitiveness Report , World Economic Forum Brazil Malaysia Mexico Turkey Japan South Korea Singapore Taiwan UK US Stage of development for Singapore s economy Singapore s economy is in the final stage of development, competing by innovation and business sophistication. Charting Economy CC BY-NC-ND

15 Wages in Singapore is highest in ASEAN and comparable to advanced economies Average monthly wages in Asia and the Pacific 2013 or latest available year (US$) Australia (2013) Singapore (2013) New Zealand (2013) Japan (2013) South Korea (2013) Hong Kong (2013) Malaysia (2013) 651 1,780 2,841 3,419 3,320 3,694 4,642 International Wage Comparison Due to differences in definitions and coverage, comparing average wages across countries is not always straightforward. The chart presents information on wage levels for countries with broadly comparable data, compiled by International Labor Organization from comprehensive National Labor Force Surveys. China (2013) Samoa (2012) Mongolia (2012) Thailand (2013) India (2011/12) Wages in Singapore Average monthly wages in Singapore in 2013 was around USD 3,694, by far the highest in ASEAN. Singapore s wage level is comparable to advanced economies. Philippines (2013) 215 Vietnam (2013) 197 Indonesia (2013) 183 Cambodia (2012) 121 Pakistan (2013) 119 Nepal (2008) 73 Source: ILO Global Wage Report 2014/15 Asia and the Pacific Supplement Charting Economy CC BY-NC-ND

16 Despite relatively low growth rate, Singapore s labor productivity is still higher than comparable Asian countries Labor productivity Per person employed in 2014 US$ (converted to 2014 price level with updated 2011 EKS PPPs) 140, , ,000 80,000 60,000 40,000 20,000 Cumulative Annual Growth Rate, Singapore (2.0%) Hong Kong (2.5%) Taiwan (2.4%) Japan (0.8%) South Korea (2.5%) Labor Productivity Labor productivity per person employed in 2014 US$ (converted to 2014 price level with updated 2011 EKS PPPs). Compiled and computed by The Conference Board from macro economic indicators in each country. This indicates labor productivity of the whole economy and is useful for analyzing the macro trend. Labor Productivity in Singapore Labor Productivity in Singapore grew 2.0% annually between Despite relatively low growth rate, its current level is still higher than comparable Asian countries such as Hong Kong, Taiwan, Japan and South Korea Source: The Conference Board Total Economy Database Charting Economy CC BY-NC-ND

17 Singapore is ranked 2 nd in the world in the latest global competitiveness rankings, second only to Switzerland Interactive chart for this page is available online to provide you with more perspectives The Global Competitiveness rankings GCI Rank (out Country/Economy of 140) Score Switzerland Singapore United States Germany Netherlands Japan Hong Kong SAR Finland Sweden United Kingdom Norway Denmark Canada #2 among all 140 Economies Qatar Taiwan, China New Zealand United Arab Emirates #1 among 9 ASEAN economies Country/Economy GCI Rank (out of 140) Score GCI Rank (out of 144) Singapore Malaysia Thailand Indonesia Philippines Vietnam Lao PDR Cambodia Myanmar Country/Economy GCI Rank (out of 140) Score Singapore Japan Hong Kong SAR Qatar Taiwan, China Malaysia Saudi Arabia Korea, Rep China Thailand Kuwait Indonesia Bahrain Kazakhstan Philippines India Vietnam Oman Jordan Sri Lanka Iran, Islamic Rep Lao PDR Cambodia Nepal Mongolia Bhutan Bangladesh Pakistan Myanmar #1 among 29 Asian economies Malaysia Belgium Luxembourg Aus tralia France Aus tria Ireland Saudi Arabia Korea, Rep Israel China Iceland Estonia Czech Republic Thailand Spain Kuwait Chile Lithuania Indonesia Portugal Bahrain Azerbaijan Poland Kazakhstan Italy Latvia Russian Federation Mauritius Philippines Malta South Africa Panama Turkey Costa Rica Romania Bulgaria India Vietnam Mexico Rwanda Slovenia Macedonia, FYR Colombia Oman Hungary Jordan Cyprus Georgia Slovak Republic Sri Lanka Peru Montenegro Botswana Morocco Uruguay Iran, Islamic Rep Brazil Ecuador Croatia Guatemala Ukraine Tajikistan Greece Armenia Lao PDR Moldova Namibia Jamaica Algeria Honduras Trinidad and Tobago Cambodia Côte d'ivoire Tunisia Albania Serbia El Salvador Zambia Seychelles Dominican Republic Kenya Nepal Lebanon Kyrgyz Republic Gabon Mongolia Bhutan Argentina Bangladesh Nicaragua Ethiopia Senegal Bosnia and Herzegovina Cape Verde Lesotho Cameroon Uganda Egypt Bolivia Paraguay Ghana Tanzania Guyana Benin Gambia, The Nigeria Zimbabwe Pakistan Mali Swaziland Liberia Madagascar Myanmar Venezuela Mozambique Haiti Malawi Burundi Global Competitiveness World Economic Forum, who publishes annual Global Competitiveness Report, defines competitiveness as the set of institutions, policies, and factors that determine the level of productivity of a country. Since 2005, the World Economic Forum has based its competitiveness analysis on the Global Competitiveness Index (GCI), a comprehensive tool that measures the microeconomic and macroeconomic foundations of national competitiveness. More information on the report can be found on its website Singapore in the Global Competitiveness Rankings Singapore is ranked 2nd in the world in the latest global competitiveness rankings, second only to Switzerland. Sierra Leone Source: The Global Competitiveness Report , World Economic Forum Mauritania Chad Guinea Charting Economy CC BY-NC-ND

18 Apart from Market size, competitiveness factors for Singapore are largely better than those of ASEAN neighbors Interactive chart for this page is available online to provide you with more perspectives The Global Competitiveness Index , ASEAN, score = Singapore Cambodia Indonesia Laos Malaysia Myanmar Philippines Thailand Vietnam Basic requirement Public and Private institutions Infrastructure Macroeconomic environment Health and primary education Efficiency enhancers Higher education and training Goods market efficiency Labor market efficiency Source: The Global Competitiveness Report , World Economic Forum Financial market development Technological readiness Market size Innovation and sophistication Business sophistication Innovation The Global Competitiveness Index The Global Competitiveness Index framework divides competitiveness factors into three groups. The first group is Basic requirements, which includes Public and Private institutions, Infrastructure, Macroeconomic environment and Health and primary education. The second group is Efficiency enhancers, including Higher education and training, goods market efficiency, labor market efficiency, financial market development, technology readiness and market size. The last group is Innovation and sophistication, including business sophistication and innovation. Global Competitiveness Index: Singapore vs ASEAN Apart from Market size, competitiveness factors for Singapore are largely better than those of ASEAN neighbors. Charting Economy CC BY-NC-ND

19 Singapore is the easiest place to do business in the world, and still improving Ease of Doing Business Ranking Selected economies, ( ) = 2016 rank, DTF* score Singapore (1) South Korea (4) Hong Kong (5) Australia (13) Malaysia (18) Japan (34) Thailand (49) China (84) Brunei (84) Vietnam (90) Philippines (103) Indonesia (109) India (130) Cambodia (127) Laos (134) Myanmar (167) Singapore s DTF* score 2016 vs 2015 TOPICS DB 2016 DB 2015 Change Starting a Business Dealing with Construction Permits Getting Electricity Registering Property Getting Credit Protecting Minority Investors Paying Taxes Trading Across Borders Enforcing Contracts Resolving Insolvency Ease of Doing Business Doing Business sheds light on how easy or difficult it is for a local entrepreneur to open and run a small to medium-size business when complying with relevant regulations. It measures and tracks changes in regulations affecting 11 areas in the life cycle of a business: starting a business, dealing with construction permits, getting electricity, registering property, getting credit, protecting minority investors, paying taxes, trading across borders, enforcing contracts, resolving insolvency and labor market regulation. Doing Business in Singapore Singapore s economy is the easiest place to do business, ranking number 1 in the World Bank s Doing Business 2016 ranking. It is also improving on a few fronts. Timor-Leste (173) 44.0 Note: (*) An economy s distance to frontier score is indicated on a scale from 0 to 100, where 0 represents the worst performance and 100 the frontier Source: Doing Business 2016: Measuring Regulatory Quality and Efficiency Charting Economy CC BY-NC-ND

20 Restrictive labor regulations is by far the most problematic factor for doing business in Singapore The most problematic factors for doing business in Singapore % of responses* Restrictive labor regulations Insufficient capacity to innovate Inflation Inadequately educated workforce Poor work ethic in labor force Access to financing Inadequate supply of infrastructure Complexity of tax regulations Tax rates Inefficient government bureaucracy Foreign currency regulations Policy instability Corruption Poor public health Crime and theft The most problematic factors for doing business As part of its Global Competitiveness Report, World Economic Forum also conducts its annual executive opinion survey which in 2015 involves over 14,000 respondents from around the world. Part of the survey is the issue of problematic factors for doing business in a given country. From the given list of factors, respondents were asked to select the five most problematic for doing business in their country and to rank them between 1 (most problematic) and 5. The bars in the figure show the responses weighted according to their rankings. The most problematic factors for doing business in Singapore Restrictive labor regulations is by far the most problematic factor for doing business in Singapore. Government instability/coups 0.0 Note: (*) From the list of factors above, respondents were asked to select the five most problematic for doing business in their country and to rank them between 1 (most problematic) and 5. The bars in the figure show the responses weighted according to their rankings 20 Source: The Global Competitiveness Report , World Economic Forum Charting Economy CC BY-NC-ND 4.0

21 In term of FDI, Singapore is on another level from other ASEAN countries and has recovered greatly from 2008 FDI into Singapore and comparable countries Net inflows, % of GDP 30.0% 25.0% 20.0% 15.0% 10.0% 5.0% 0.0% Indonesia Source: The World Bank Malaysia Thailand Singapore Hong Kong Singapore India Indonesia Thailand South Korea Malaysia Vietnam Philippines Myanmar Cambodia Average FDI, Net inflows, Current US$ billion Brunei Laos Foreign direct investment, net inflows (BoP, current US$) Foreign direct investment are the net inflows of investment to acquire a lasting management interest (10 percent or more of voting stock) in an enterprise operating in an economy other than that of the investor. It is the sum of equity capital, reinvestment of earnings, other long-term capital, and short-term capital as shown in the balance of payments. This series shows net inflows (new investment inflows less disinvestment) in the reporting economy from foreign investors. Data are in current U.S. dollars. Foreign direct investment, net inflows (% of GDP) This series shows net inflows (new investment inflows less disinvestment) in the reporting economy from foreign investors, and is divided by GDP. Foreign direct investment into Singapore In term of FDI, Singapore is on another level from other ASEAN countries and has recovered greatly from In absolute term, FDI into Singapore averages USD 63 billion over the past three years. As percentage of GDP, it has recovered to 21.9% from the recent bottom in Charting Economy CC BY-NC-ND

22 CONTENT SUMMARY ECONOMIC PROFILE ECONOMIC OUTLOOK Structure Competitiveness Development Growth Stability Singapore s per capita income is on another level from other ASEAN countries Along with Brunei, Singapore has no absolute poverty Unemployment rate in Singapore has declined over the past three years and is expected to remain low in 2016 Income distribution in Singapore is the worst in ASEAN Singapore s Human Development Index has improved fast over the past three decades and is now ranked 9th in the world, highest among ASEAN countries Quality of life in Singapore is equivalent to those in developed countries Economic Development Part of the country s economic profile, this section explores the country s economic development, average income and its distribution, poverty as well as other development indicators. Charting Economy CC BY-NC-ND

23 Singapore s per capita income is on another level from other ASEAN countries GNI per capita , Purchasing Power Parity in 2011 international dollars GNI per capita comparison 2014, Purchasing Power Parity in current international dollars 90,000 80,000 70,000 60,000 50,000 40,000 30,000 20,000 10,000 0 South Korea CAGR = 4.4% Singapore CAGR = 3.5% Malaysia CAGR = 3.6% Singapore Hong Kong Korea, Rep. Malaysia Thailand China Indonesia Philippines India Vietnam Laos Bangladesh Cambodia 34,620 24,080 13,840 13,130 10,190 8,380 5,640 5,350 5,060 3,330 3,100 56,570 80,270 GNI per capita, PPP GNI per capita based on purchasing power parity (PPP). PPP GNI is gross national income (GNI) converted to international dollars using purchasing power parity rates. An international dollar has the same purchasing power over GNI as a U.S. dollar has in the United States. GNI is the sum of value added by all resident producers plus any product taxes (less subsidies) not included in the valuation of output plus net receipts of primary income (compensation of employees and property income) from abroad. The constant 2011 international dollars version is useful to calculate real growth while the current international dollars version is useful to compare per capita income level across countries. Singapore s per capita income Singapore s per capita income is on another level from other ASEAN countries and stood at USD 80,270 in It has grew on average 3.5% a year since Source: The World Bank; Charting Economy analysis Charting Economy CC BY-NC-ND

24 Along with Brunei, Singapore has no absolute poverty Interactive chart for this page is available online to provide you with more perspectives Singapore s Poverty Headcount % of population living below the national poverty line ASEAN Poverty Headcount % of population living below the national poverty line 50% 45% 40% 35% 30% 25% 20% 15% 10% 5% 0% Note: (*) There can be various definitions of poverty, we use National poverty rate, the percentage of the population living below the national poverty line. National estimates are based on populationweighted subgroup estimates from household surveys. Source: Integrated Household Living Conditions Survey in Myanmar , World Bank Myanmar (2010) Philippines (2012) Laos (2012) India (2012) Cambodia (2012) Vietnam (2012) Thailand (2012) Indonesia (2014) China (1998) Malaysia (2012) Brunei Singapore 4.6% 1.7% 0.0% 0.0% 12.6% 11.3% 17.7% 17.2% 25.6% 25.2% 23.2% 21.9% Poverty headcount National poverty rate is the percentage of the population living below the national poverty line. National estimates are based on population-weighted subgroup estimates from household surveys. Singapore s poverty headcount Along with Brunei, Singapore has no absolute poverty. Charting Economy CC BY-NC-ND

25 Unemployment rate in Singapore has been below 2% over the past 4 years and is expected to remain so in 2016 Interactive chart for this page is available online to provide you with more perspectives Singapore s Unemployment rate % of total labor force Projected Unemployment rate* 2016, % of total labor force 10.0% 9.0% 8.0% 7.0% 6.0% 5.0% 4.0% 3.0% Euro area Philippines Indonesia US China Myanmar Japan Malaysia Brunei 6.0% 5.6% 4.9% 4.1% 4.0% 3.5% 3.0% 2.7% 10.5% Unemployment rate Unemployment rate equals unemployed persons divided by total labor force. Unemployed persons is defined as persons with the age of 15 years and over who during the week in which the survey is conducted, do not work, have no job, business enterprise or farm of their own. Persons in this category include those who are looking for a job, applying for a job or waiting to be called to work during the past 30 days prior to the interview date and those who are not looking for work during the past 30 days prior to the interview date, but are otherwise available for work during the 7 days prior to the interview date. Total labor force comprises current labor force and seasonally inactive labor force. 2.0% 1.0% Vietnam Singapore 2.5% 2.0% Unemployment rate in Singapore Unemployment rate in Singapore has been below 2% over the past 4 years and is expected to remain so in % Thailand 0.8% Note: (*) Forecasted by IMF in World Economic Outlook report, October 2015 Source: Singapore Department of Statistics, IMF Charting Economy CC BY-NC-ND

26 According to its GINI coefficient, income distribution in Singapore is the worst in ASEAN GINI Coefficient Myanmar (2001) Cambodia (2012) Japan (2008) Indonesia (2010) Laos (2012) Vietnam (2013) Thailand (2012) US (2013) Brunei (2005) China (2010) Philippines (2012) Malaysia (2009) The Gini coefficient is a measure of inequality of a distribution of income It is defined as a ratio with values between 0 and 1 Here, 0 corresponds to perfect income equality (i.e. everyone has the same income) 1 corresponds to perfect income inequality (i.e. one person has all the income, while everyone else has zero income) Therefore, the lower the ratio the better the income distribution. GINI coefficient The Gini coefficient measures the inequality among values of a frequency distribution (for example levels of income). A Gini coefficient of zero expresses perfect equality where all values are the same (for example, where everyone has an exactly equal income). A Gini coefficient of one (100 on the percentile scale) expresses maximal inequality among values (for example where only one person has all the income) Income distribution in Singapore According to its GINI coefficient, income distribution in Singapore is the worst in ASEAN. Singapore (2006) Source: World Bank, ASEAN Community In Figures Charting Economy CC BY-NC-ND

27 Singapore s Human Development Index has improved fast over the past three decades and is now ranked 9 th in the world, highest among ASEAN countries HUMAN DEVELOPMENT INDEX* Singapore HDI AND HDI RANK 2013, selected countries Human Development Index Human Development Index (HDI): A composite index measuring average achievement in three basic dimensions of human development a long and healthy life, knowledge and a decent standard of living. HDI is calculated every year by UNDP World East Asia and Pacific Singapore s HDI and ranking Singapore s Human Development Index has improved fast over the past three decades and is now ranked 9th in the world, highest among ASEAN countries. Singapore and Brunei are the two ASEAN countries in the Very high human development group Note: (*) Human Development Index (HDI): A composite index measuring average achievement in three basic dimensions of human development a long and healthy life, knowledge and a decent standard of living. HDI is calculated every year by UNDP 27 Source: UNDP s Human Development Report Charting Economy CC BY-NC-ND 4.0

28 Quality of life in Singapore is equivalent to those in developed countries Interactive chart for this page is available online to provide you with more perspectives Life expectancy at birth Total (years) Singapore East Asia & Pacific OECD Mortality rate under 5 Per 1000 live births East Asia & Pacific OECD Singapore % 90% 80% 70% 60% 50% 40% 30% 20% 10% Life basic facilities % of population with access Water source Sanitation facilities 0% Life expectancy at birth Life expectancy at birth indicates the number of years a newborn infant would live if prevailing patterns of mortality at the time of its birth were to stay the same throughout its life. Mortality rate under 5 per 1000 live births Under-five mortality rate is the probability per 1,000 that a newborn baby will die before reaching age five, if subject to current age-specific mortality rates. Water source access Access to an improved water source refers to the percentage of the population with reasonable access to an adequate amount of water from an improved source. Sanitation facilities access Access to improved sanitation facilities refers to the percentage of the population with at least adequate access to excreta disposal facilities that can effectively prevent human, animal, and insect contact with excreta. Quality of life in Singapore Quality of life in Singapore is equivalent to those in developed countries, with even better life expectancy and mortality rate than those of OECD countries. Everyone in Singapore can get access to life basic facilities. Source: The World Bank Charting Economy CC BY-NC-ND

29 CONTENT SUMMARY ECONOMIC PROFILE ECONOMIC OUTLOOK Structure Competitiveness Development Growth Stability Over the last 10 years, Singapore s economy has grown on average 5.8% per year, lower than China, India, CLMV, but still higher than most in ASEAN5 and developed economies For the whole 2014, Singapore s GDP grew 2.9% driven mainly by export On the production side, almost all sectors contributed positively to the growth In 3Q15, Singapore s economy grew 1.9%, its lowest growth in 3 years. Big increase in Import was the real drag while other expenditures contributed positively on the total growth. New normal of growth level for Singapore is around 3% for the next three years Growth expectation for Singapore s economy has been lower during the last 3 months Economic Growth Part of the country s economic outlook, this section explores the country s recent economic growth, its key drivers and well as the growth outlook for the coming years. Charting Economy CC BY-NC-ND

30 Over the last 10 years, Singapore s economy has grown on average 5.8% per year, lower than China, India, CLMV, but still higher than most in ASEAN5 and developed economies Interactive chart for this page is available online to provide you with more perspectives 20% 15% 10% 5% 0% -5% Real GDP growth vs China and India Annual percentage change Singapore, 5.8% China, 10.0% India, 7.7% % 15% 10% 5% 0% -5% Real GDP growth vs CLMV Annual percentage change Myanmar, 8.2% Singapore, 5.8% Cambodia, 7.5% Laos, 7.8% VN, 6.2% Economic growth Economic growth is the increase in the amount of the goods and services produced by an economy over time. It is conventionally measured as the percent rate of increase in real gross domestic product, or real GDP. Growth is usually calculated in real terms i.e., inflation-adjusted terms to eliminate the distorting effect of inflation on the price of goods produced. 20% 15% 10% 5% 0% Real GDP growth vs Comparable ASEAN Annual percentage change Singapore, 5.8% Thailand, 3.5% Malaysia 4.9% Philippines 5.3% 20% 15% 10% 5% 0% -5% Real GDP growth vs Developed economies Annual percentage change Singapore, 5.8% US, 1.5% Japan, 0.6% Euro area 0.7% Historical growth for Singapore s economy Over the last 10 years, Singapore s economy has grown on average 5.8% per year, lower than China, India, CLMV, but still higher than most in ASEAN5 and developed economies. -5% % Note: (*) Labels denote countries and their cumulative annual growth rate between Source: IMF Charting Economy CC BY-NC-ND

31 In 2014, Singapore s GDP grew 2.9% driven mainly by export Real growth by expenditure 2014, % change from last year GDP growth contribution % Contributions to total Real GDP growth GDP C X M G 0.1% 2.9% 2.5% 2.1% 1.4% X GDP Discrepancy C G 1.0% 0.9% 0.0% 2.9% 4.1% Real growth by expenditure Real GDP growth and the growth in each of its composition on the expenditure side which are C = Private Consumption, I = Investment including: I (capital) = Capital formation and I (inventory) = change in inventory G = Public consumption, X = Export of goods and services, M = Import of goods and services GDP growth contribution Growth contribution shows portions of the total growth from each composition. They must add up to the total growth. Import is a deduction to GDP and the growth in Import contributes negatively to the overall GDP growth. I (capital) I -1.9% -2.4% I (inventory) I (capital) M -2.4% -0.2% -0.5% Growth drivers for Singapore s economy in 2014 In 2014, Singapore s GDP grew 2.9% driven mainly by the increase in export which contributed +4.1%. The increase in private consumption also contributed positively (+0.9%) to the overall growth. The decrease in Investment and the increase in Import both contributed negatively to the overall growth. Note: (*) C = Private Consumption, I = Investment including: I (capital) = Capital formation and I (inventory) = change in inventory G = Public consumption, X = Export of goods and services, M = Import of goods and services Source: Department of Statistics, Singapore; Charting Economy analysis Charting Economy CC BY-NC-ND

32 On the production side, Financial sector contributed the most to the overall growth Real growth by production sectors 2014, % change of value added from last year GDP growth contribution % Contributions to total Real GDP growth Finance & Insurance Ownership of dwelling ICT 4.3% 3.6% 7.7% GDP Finance & Insurance Manufacturing 0.9% 0.5% 2.9% Real GDP growth by production sectors It shows the real growth rate of value add from each production sector. Construction GDP Business services Manufacturing Other services Utilities Trade Transport Other goods 3.0% 2.9% 2.9% 2.6% 2.4% 2.1% 1.7% 1.7% 1.6% Business services Trade Other services Construction Ownership of dwelling ICT Transport Utilities Hotel & restaurant 0.4% 0.3% 0.2% 0.1% 0.1% 0.1% 0.1% 0.0% 0.0% GDP growth contribution from production sectors GDP growth contribution from production sectors shows each sector s contribution to the total GDP growth. The contribution from each sector must add up to the total GDP growth Most contributing sectors for Singapore s economy in 2014 On the production side, almost all sectors contributed positively to the. Finance and Insurance contributed the most to the overall growth. Hotel & restaurant 1.1% Other goods 0.0% Taxes on products -0.3% Source: Department of Statistics, Singapore; Charting Economy analysis Taxes on products 0.0% Charting Economy CC BY-NC-ND

33 In 3Q15, Singapore s economy grew 1.9%, its lowest growth in 3 years Real GDP growth Year-on-year, 3Q15 India 7.4% Singapore s Real GDP growth Year-on-year, last 8 quarters China Vietnam Philippines Malaysia Indonesia Thailand South Korea Hong Kong US Singapore 6.9% 6.8% 6.0% 4.7% 4.7% 2.9% 2.7% 2.3% 2.2% 1.9% 5.4% 4.6% 2.3% 2.8% 2.1% 2.7% 2.0% 1.9% GDP growth in the latest quarter Real GDP growth in the latest quarter from major economies in the world sorted from highest to lowest. GDP growth for Singapore s economy in 3Q15 In 3Q15, Singapore s economy grew 1.9% year-on-year, its lowest growth rate in 3 years. Euro area 1.6% South Africa 1.0% Japan 1.0% Taiwan -0.6% Russia Brazil -4.1% -4.5% 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 Source: The Economist, Department of Statistics, Singapore; Charting Economy analysis Charting Economy CC BY-NC-ND

34 Big increase in Import was the real drag while other expenditures contributed positively on the total growth Source of Real GDP growth 3Q14 4Q14 1Q15 2Q15 3Q15 C 0.6% 0.8% 1.1% 1.3% 1.7% I -2.5% -0.5% -7.7% -1.9% 1.7% I (capital) -1.5% 0.3% -0.5% 1.0% 0.0% I (inventory) -1.0% -0.8% -7.2% -2.9% 1.6% G 0.0% 0.3% 0.6% 0.1% 1.1% X -0.7% 0.5% 8.5% 2.2% 6.3% M 4.4% -0.9% 0.7% 0.6% -9.8% Discrepancy 0.9% 2.0% -0.5% -0.4% 0.8% GDP 2.8% 2.1% 2.7% 2.0% 1.9% Source of Growth Growth contribution shows portions of the total growth from each composition. They must add up to the total growth. Import is a deduction to GDP and the growth in Import contributes negatively to the overall GDP growth. Growth drivers for Singapore s economy Big increase in Import was the real drag on the total growth, contributing -9.8% in 3Q15. Meanwhile other expenditures contributed positively on the total growth. We see this as a good outlook for Export in the following quarters as companies are stocking up raw materials for future sales. Note: (*) C = Private Consumption, I = Investment including: I (capital) = Capital formation and I (inventory) = change in inventory G = Public consumption, X = Export of goods and services, M = Import of goods and services Source: Department of Statistics, Singapore; Charting Economy analysis Charting Economy CC BY-NC-ND

35 A new normal of growth level for Singapore is around 3% for the next three years GDP growth projections % of real growth from the year before Myanmar Laos India Cambodia China Vietnam Philippines Indonesia Malaysia World Korea US Hong Kong Thailand Taiwan Singapore Euro area Japan Brunei Source: IMF World Economic Outlook Oct GDP growth projections GDP growth projection is an exercise done by various parties, international and domestic. We use the projections by International Monetary Fund which releases in its World Economic Outlook report in April and October of every year. Growth for Singapore s economy Singapore s economy is expected to grow 2.2% in 2015 but will expand faster in 2016 and 2017 with 2.9% and 3.2% growth rate respectively. Charting Economy CC BY-NC-ND

36 Growth expectation for Singapore s economy has been lower during the last 3 months Interactive chart for this page is available online to provide you with more perspectives Change in consensus GDP growth projections Annual Percentage Change, as of month ending Change in consensus GDP growth projections Tracking the change in consensus GDP growth projections is useful to gauge the mood and expectation from the market. We use figures published weekly in The Economist magazine who surveys from market economists/participants. Expectation for Singapore s economy Growth expectation for Singapore s economy for 2015 and 2016 has been lower during the last 3 months. APR-15 MAY-15 JUN-15 JUL-15 AUG-15 SEP-15 OCT-15 NOV-15 Forecast as of, month ending Source: The Economist Poll Charting Economy CC BY-NC-ND

37 CONTENT SUMMARY ECONOMIC PROFILE ECONOMIC OUTLOOK Structure Competitiveness Development Growth Stability Price level in Singapore has been in declining trend especially in 2015 where there has been mild deflation Singapore STI index has been the worst performer in ASEAN during the first 11 months of 2015 Banking sector has always been sound, with high capital ratio and low NPL Fiscal balance is healthy with large surplus while the high public debt level is backed by assets Strong current account surplus has always been key characteristic of Singapore s economy and is projected to continue Singapore has zero external debt and its high international reserves can adequately covers merchandise import Singapore Dollar depreciated more than 6% against USD during the first 11 months of 2015 Economic Stability Part of the country s economic outlook, this section explores the country s macro economic risks, including inflation, financial sector, budget deficit as well as balance of payment and exchange rate. Charting Economy CC BY-NC-ND

38 Price level in Singapore has been in declining trend especially in 2015 where there has been mild deflation Interactive chart for this page is available online to provide you with more perspectives Singapore s Inflation Percentage change in consumer price index Projected Inflation* 2016, annual percentage change in CPI 8.0% Myanmar 8.4% Indonesia 6.8% 6.0% 4.0% India ASEAN 5 Laos World Malaysia 4.1% 4.0% 3.2% 2.7% 6.1% Inflation Inflation is normally calculated from the change in the Consumer Price Index (CPI). CPI is the general price level of goods and services purchased by consumers. 2.0% Vietnam Philippines China Japan Thailand US 2.5% 2.1% 1.2% 1.0% 0.3% 0.1% Inflation in Singapore Price level in Singapore has been in declining trend especially in 2015 where there has been mild deflation, thanks mainly to lower fuel prices. Inflation in Singapore for the full year 2016 is expected to be zero. 0.0% Euro area 0.1% Singapore 0.0% Brunei 0.0% -2.0% Q15 3Q15 Cambodia -0.3% Note: (*) Forecasted by IMF in World Economic Outlook report, October 2015 Source: IMF, Singapore Department of Statistics Charting Economy CC BY-NC-ND

39 Singapore STI index has been the worst performer in ASEAN during the first 11 months of 2015 Stock Market Performance Year-to-date percentage change, as of Nov 30 th 2015 Euro (Euro Stoxx 50) 11.4% US (Nasdaq) 7.9% Vietnam (Ho Chi Minh) 5.1% US (S&P 500) US (DJIA) UK (FTSE 100) -0.6% -3.2% 1.0% Stock market performance Year-to-date performance of ASEAN stock markets and global benchmark indices. China (SSE180) Philippines (PSEi) Malaysia (KLCI) -3.9% -4.2% -5.1% Latest development Singapore STI index has been the worst performer in ASEAN during the first 11 months of 2015, dropping 15.1%. Hong Kong (Hang Seng) -6.8% Thailand (SET) -9.2% Laos (LSXC) Indonesia (JCI) Singapore (STI) -14.9% -15.1% -12.1% Source: Bloomberg; Charting Economy analysis Charting Economy CC BY-NC-ND

40 Singapore s banking sector has always been sound, with high capital ratio and low NPL Singapore s Banking sector Bank Capital ratio 2014, % of assets 12.0% 10.0% 8.0% 6.0% Bank capital to assets ratio (%) Indonesia US Brunei Malaysia Philippines Thailand Hong Kong Singapore South Korea 12.8% 11.7% 11.3% 10.0% 9.9% 9.5% 9.0% 8.4% 8.0% Stability in banking sector Stability in banking sector is achieved when there is a high capital ratio as well as low bad debt among banks. Capital ratio is bank capital divided by assets. Bad debt is usually measured by gross non-performing loan divided by total loans. Singapore s banking sector Singapore s banking sector has always been sound, with high capital ratio and low NPL. 4.0% Gross NPL to Total loans (%) New Zealand Euro area 7.4% 7.2% 2.0% China Australia 6.6% 5.9% Japan 5.5% 0.0% Macao 3.6% Source: The World Bank; Charting Economy analysis Charting Economy CC BY-NC-ND

41 Singapore s fiscal balance is healthy with large surplus each year while the high public debt level is backed by assets Interactive chart for this page is available online to provide you with more perspectives Singapore s General government structural balance* % of GDP 14.0% 12.0% 10.0% 8.0% 6.0% Actual Forecast* Projected General government structural balance** 2015, % of GDP Singapore Philippines Thailand Euro area China Indonesia Advanced economies US Malaysia Japan Projected General government debt** 2015, % of GDP Fiscal or Government budget balance Budget balances are the government revenues net of the government expenditures. When compared across countries, it is commonly standardized in the form of percentage of GDP. Public debt Public debt includes direct government debt, debt of State Enterprises and others. When compared across countries, it is commonly standardized in the form of percentage of GDP. 4.0% 2.0% 0.0% N.A. N.A. N.A. N.A. N.A. India Brunei Cambodia Laos Myanmar Vietnam Singapore s fiscal situation Singapore s fiscal balance is healthy with large surplus each year while the high public debt level is backed by assets. Unlike other government that borrow to cover budget deficit, Singapore borrow to invest in assets (usually overseas). Note: (*) Excluding cyclical and extraordinary income/expenses (**) Forecasted by IMF in World Economic Outlook report, Oct 2015 Source: IMF Charting Economy CC BY-NC-ND

42 Strong current account surplus has always been key characteristic of Singapore s economy and is projected to continue Interactive chart for this page is available online to provide you with more perspectives Singapore s Current Account balance USD billion 0 Actual Forecast* Note: (*) Forecasted by IMF in World Economic Outlook report, Oct 2015 (**) Current Account = Trade balance + service income (***) Forecasted by the Economist Poll Source: IMF, The World Bank; Charting Economy analysis Current Account balance As % of 2015 GDP*** Singapore Q3 Taiwan Q3 South Korea Sep Russia Q3 Philippines Jun China Q3 Hong Kong Q2 Euro Area Sep Japan Sep Vietnam 2014 Malaysia Q3 Thailand Q2 Pakistan Q3 India Q2 Indonesia Q3 US Q2 Australia Q2 Brazil Oct -0.7% -1.1% -2.5% -2.5% -3.8% -3.8% 12.8% 8.0% 5.5% 4.1% 3.1% 2.8% 2.8% 2.7% 2.7% 2.5% 2.4% 21.2% Current Account balance Current Account balance equals Trade balance plus Net Services. Trade balance refers to net export (export less import) of goods. Net Services are the net result of foreign trade related to services, defined as the net export (export less import) of services. Income consists of compensation of employees, investment income, and donation and grant. Current Account balance reflects the capability of a country to obtain foreign exchange through commercial means. Singapore s Current Account Strong current account surplus has always been key characteristic of Singapore s economy, with by far the highest current account balance as percentage of GDP. Singapore s current account surplus of USD 66.3 billion in the last twelve months ending 1Q15 exceeded expectation. Charting Economy CC BY-NC-ND

43 Singapore has zero external debt and its high international reserves can adequately covers merchandise import Singapore s International Reserves USD billion Import cover Reserves in number of months of import International reserves International reserve assets refer to external assets that are held or controlled by central bank and are readily available for immediate uses, for instance, in financing payment imbalances or in implementing exchange rate policy External debt External debt refers to the remaining outstanding portion of liabilities (excluding equity) which residents have over nonresidents of an economy. Singapore s International Wealth Singapore has the highest international reserves in ASEAN, even higher than Germany. Another unique point for Singapore is that it has zero external debt. Its current international reserves can cover more than 10 months of merchandise import. 240 Nov-14 Feb-15 May-15 Aug-15 Nov Oct-14 Jan-15 Apr-15 Jul-15 Oct-15 Source: The World Bank; Charting Economy analysis Charting Economy CC BY-NC-ND

44 Singapore dollar was the second worst performers among ASEAN currencies in 2014, depreciated more than 4% against USD ASEAN Exchange rate performance Change in value against USD, percentage THB LAK PHP KHR VND IDR -0.2% -0.6% -0.9% -1.2% -1.2% -1.8% 1-year (2014) -27.1% -3.9% 3-year ( ) -1.0% -2.1% -0.7% -1.8% -24.3% -13.5% 5-year ( ) 1.3% 4.9% 3.4% 3.0% Exchange rate A stable exchange rate is preferred in the world where most countries adopt floating rate policy. Volatile exchange rate can certainly harm international trade and investment. Singapore s exchange rate Singapore dollar was the second worst performers among ASEAN currencies in 2014, depreciated more than 4% against USD. However, over the 5-year period, it has gained 6.2% against USD. BND -4.0% -1.9% 6.2% MMK -4.0% N/A N/A SGD -4.1% -1.8% 6.2% MYR -5.9% -9.3% -2.1% Source: Oanda Charting Economy CC BY-NC-ND

45 Singapore Dollar depreciated more than 6% against USD during the first 11 months of 2015 Singapore Dollar Exchange Rate Per USD, mid point Singapore Dollar Value Indexed per USD, mid point, 31/12/14 = Exchange rate A stable exchange rate is preferred in the world where most countries adopt floating rate policy. Volatile exchange rate can certainly harm international trade and investment. YTD change in Singapore Dollar Singapore Dollar depreciated more than 6% against USD during the first 11 months of /12/14 31/03/15 30/06/15 30/09/ /12/14 31/03/15 30/06/15 30/09/ Source: Oanda Charting Economy CC BY-NC-ND

46 APPENDIX 1: KEY PROJECTIONS From IMF s World Economic Outlook Report October 2015

47 KEY PROJECTIONS: SINGAPORE S ECONOMY Indicators Units Estimates Start After Current account balance Billion USD General government gross debt % of GDP General government structural balance % of potential GDP Gross domestic product per capita, current prices USD 53,122 54,578 55,980 56,287 53,224 55,509 58,665 61,942 65,311 69, Gross domestic product, constant prices % change Gross domestic product, current prices Billion USD Inflation, average consumer prices % change Population Million Persons Unemployment rate % of total labor force Source: IMF World Economic Outlook Oct On Projections Economic projections change all the time, given new data available. Even best forecasters, IMF included, do not often get them right at the end. Do not take them as certainty, but a guideline to apply to your business, if you need to. Charting Economy CC BY-NC-ND

48 APPENDIX 2: DOING BUSINESS 2016 Detailed rankings and scores for Singapore and comparable economies 48

49 Singapore is the easiest place in ASEAN to start a business Starting a business rank Economy Rank DTF* Procedures (number) Time (days) Cost (% of income per capita) Paid in min. capital (% of income per capita) New Zealand Hong Kong SAR, China Singapore Australia Malaysia Korea, Rep Brunei Darussalam Japan Thailand Timor Leste Vietnam China Lao PDR India Myanmar Philippines Indonesia Cambodia Central African Republic Starting a Business This topic measures the paid-in minimum capital requirement, number of procedures, time and cost for a small- to medium-sized limited liability company to start up and formally operate. To make the data comparable across 189 economies, Doing Business uses a standardized business that is 100% domestically owned, has start-up capital equivalent to 10 times income per capita, engages in general industrial or commercial activities and employs between 10 and 50 people one month after the commencement of operations, all of whom are domestic nationals. The most recent round of data collection for the project was completed in June Starting a Business in Singapore Singapore is the easiest place in ASEAN to start a business with very low cost and short amount of time. Note: (*) An economy s distance to frontier score is indicated on a scale from 0 to 100, where 0 represents the worst performance and 100 the frontier Source: Doing Business 2016: Measuring Regulatory Quality and Efficiency Charting Economy CC BY-NC-ND

50 Getting construction in Singapore takes less than a month at relatively low cost Dealing with Construction Permits rank Economy Rank DTF* Procedures (number) Time (days) Cost (% of warehouse value) Building quality control index (0 15) Singapore Australia Hong Kong SAR, China Vietnam Malaysia Brunei Darussalam Korea, Rep Thailand Lao PDR Japan Myanmar Philippines Indonesia Timor Leste China Cambodia India Afghanistan Dealing with Construction Permits This topic tracks the procedures, time and cost to build a warehouse including obtaining necessary the licenses and permits, submitting all required notifications, requesting and receiving all necessary inspections and obtaining utility connections. In addition, this year Doing Business introduces a new measure, the building quality control index, evaluating the quality of building regulations, the strength of quality control and safety mechanisms, liability and insurance regimes, and professional certification requirements. The most recent round of data collection was completed in June Getting construction permits in Singapore Getting construction in Singapore takes less than a month at relatively low cost. Note: (*) An economy s distance to frontier score is indicated on a scale from 0 to 100, where 0 represents the worst performance and 100 the frontier Source: Doing Business 2016: Measuring Regulatory Quality and Efficiency Charting Economy CC BY-NC-ND

51 Getting electricity in Singapore is rather an easy task Getting Electricity rank Economy Rank DTF* Procedures (number) Time (days) Cost (% of income per capita) Reliability of supply and transparency of tariff index (0 8) Korea, Rep Singapore Hong Kong SAR, China Thailand Malaysia Japan Philippines Australia Indonesia Brunei Darussalam India China Timor Leste Vietnam Cambodia Myanmar Lao PDR Bangladesh Getting Electricity This topic tracks the procedures, time and cost required for a business to obtain a permanent electricity connection for a newly constructed warehouse. In addition to assessing efficiency of connection process, new indicators were added to measure reliability of power supply and transparency of tariffs and the price of electricity. The most recent round of data collection for the project was completed in June Getting Electricity in Singapore Getting electricity in Singapore is rather an easy task. It takes a littler longer than a month with relatively low cost. Note: (*) An economy s distance to frontier score is indicated on a scale from 0 to 100, where 0 represents the worst performance and 100 the frontier Source: Doing Business 2016: Measuring Regulatory Quality and Efficiency Charting Economy CC BY-NC-ND

52 Registering property in Singapore takes less than 5 days with minimum cost Registering Property rank Economy Rank DTF* Procedures (number) Time (days) Cost (% of property value) Quality of the land administration index (0 30) New Zealand Singapore Malaysia Korea, Rep China Australia Japan Thailand Vietnam Hong Kong SAR, China Lao PDR Philippines Cambodia Indonesia India Myanmar Brunei Darussalam Bangladesh Timor Leste no practice no practice no practice 0.0 Registering Property This topic examines the steps, time and cost involved in registering property, assuming a standardized case of an entrepreneur who wants to purchase land and a building that is already registered and free of title dispute. In addition, this year Doing Business adds a new measure to the set of registering property indicators, an index of the quality of the land administration system in each economy. The quality of land administration index has four dimensions: reliability of infrastructure, transparency of information, geographic coverage and land dispute resolution. The most recent round of data collection for the project was completed in June Registering Property in Singapore Registering property in Singapore takes less than 5 days with minimum cost. Note: (*) An economy s distance to frontier score is indicated on a scale from 0 to 100, where 0 represents the worst performance and 100 the frontier Source: Doing Business 2016: Measuring Regulatory Quality and Efficiency Charting Economy CC BY-NC-ND

53 Getting credit in Singapore is rather easy with fair credit bureau coverage and strong legal rights Getting Credit rank Economy Rank DTF* Strength of legal rights index (0 12) Depth of credit information index (0 8) Credit registry coverage (% of adults) Credit bureau coverage (% of adults) New Zealand Australia Cambodia Hong Kong SAR, China Singapore Malaysia Vietnam India Korea, Rep Indonesia Lao PDR Brunei Darussalam China Japan Thailand Philippines Timor Leste Myanmar Yemen, Rep Getting Credit This topic explores two sets of issues the strength of credit reporting systems and the effectiveness of collateral and bankruptcy laws in facilitating lending. The most recent round of data collection for the project was completed in June Getting Credit in Singapore Getting credit in Singapore is rather easy with fair credit bureau coverage and strong legal rights. Note: (*) An economy s distance to frontier score is indicated on a scale from 0 to 100, where 0 represents the worst performance and 100 the frontier Source: Doing Business 2016: Measuring Regulatory Quality and Efficiency Charting Economy CC BY-NC-ND

54 Minority investors in Singapore are treated best in the world Protecting Minority Investors rank Economy Rank DTF Strength of minority investor protection index (0 10) Extent of conflict of interest regulation index (0 10) Extent of disclosure index (0 10) Note: (*) An economy s distance to frontier score is indicated on a scale from 0 to 100, where 0 represents the worst performance and 100 the frontier Source: Doing Business 2016: Measuring Regulatory Quality and Efficiency Extent of director liability index (0 10) Ease of shareholder suits index (0 10) Extent of shareholder governance index (0 10) Extent of shareholder rights index (0 10) Extent of ownership and control index (0 10) Hong Kong SAR, China New Zealand Singapore Malaysia India Korea, Rep Japan Thailand Australia Timor Leste Indonesia Cambodia Vietnam Brunei Darussalam China Philippines Lao PDR Myanmar Afghanistan Extent of corporate transparency index (0 10) Protecting Minority Investors This topic measures the strength of minority shareholder protections against misuse of corporate assets by directors for their personal gain as well as shareholder rights, governance safeguards and corporate transparency requirements that reduce the risk of abuse. The most recent round of data collection for the project was completed in June Minority Investors in Singapore Minority investors in Singapore are treated best in the world, along with Hong Kong and New Zealand. Charting Economy CC BY-NC-ND

55 Total tax rate in Singapore is lower than most ASEAN economies Paying Taxes rank Economy Rank DTF Payments (number per year) Time (hours per year) Total tax rate (% of profit) Profit tax (% of profit) Labor tax and contributions (% of profit) Other taxes (% of profit) Qatar Hong Kong SAR, China Singapore Brunei Darussalam Korea, Rep Malaysia Australia Timor Leste Thailand Myanmar Cambodia Japan Philippines Lao PDR China Indonesia India Vietnam Bolivia Paying Taxes This topic addresses the taxes and mandatory contributions that a medium-size company must pay or withhold in a given year, as well as measures the administrative burden in paying taxes. The most recent round of data collection for the project was completed on June 1, 2015 covering for the Paying Taxes indicator calendar year 2014 (January 1, 2014 December 31, 2014). Paying Taxes in Singapore Total tax rate in Singapore is lower than most ASEAN economies. Note: (*) An economy s distance to frontier score is indicated on a scale from 0 to 100, where 0 represents the worst performance and 100 the frontier Source: Doing Business 2016: Measuring Regulatory Quality and Efficiency Charting Economy CC BY-NC-ND

56 Trading across borders in Singapore is easier than in any other ASEAN economy Trading Across Borders rank Economy Rank DTF Time to export: Border compliance (hours) Cost to export: Border compliance (USD) Time to export: Documentary compliance (hours) Cost to export: Documentary compliance (USD) Time to import: Border compliance (hours) Cost to import: Border compliance (USD) Time to import: Documentary compliance (hours) Cost to import: Documentary compliance (USD) Austria Korea, Rep Singapore Hong Kong SAR, China Malaysia Japan Thailand Timor Leste Philippines China Cambodia Vietnam Indonesia Lao PDR Brunei Darussalam India Myanmar Congo, Dem. Rep Trading Across Borders Doing Business records the time and cost associated with the logistical process of exporting and importing goods. Under the new methodology introduced this year, Doing Business measures the time and cost (excluding tariffs) associated with three sets of procedures documentary compliance, border compliance and domestic transport within the overall process of exporting or importing a shipment of goods. The most recent round of data collection for the project was completed in June Trading Across Borders in Singapore Trading across borders in Singapore is easier than in any other ASEAN economy. Note: (*) An economy s distance to frontier score is indicated on a scale from 0 to 100, where 0 represents the worst performance and 100 the frontier Source: Doing Business 2016: Measuring Regulatory Quality and Efficiency Charting Economy CC BY-NC-ND

57 Enforcing contracts in Singapore takes less than 5 months with relatively low cost Enforcing Contracts rank Economy Rank DTF Time (days) Cost (% of claim) Quality of judicial processes index (0 18) Singapore Korea, Rep Australia China Hong Kong SAR, China Malaysia Japan Thailand Vietnam Lao PDR Brunei Darussalam Philippines Indonesia Cambodia India Myanmar Bangladesh Timor Leste Enforcing Contracts The enforcing contracts indicator measures the time and cost for resolving a commercial dispute through a local first-instance court. In addition, this year it introduces a new measure, the quality of judicial processes index, evaluating whether each economy has adopted a series of good practices that promote quality and efficiency in the commercial court system. The most recent round of data collection was completed in June Enforcing Contracts in Singapore Enforcing contracts in Singapore takes less than 5 months with relatively low cost. Note: (*) An economy s distance to frontier score is indicated on a scale from 0 to 100, where 0 represents the worst performance and 100 the frontier Source: Doing Business 2016: Measuring Regulatory Quality and Efficiency Charting Economy CC BY-NC-ND

58 Resolving insolvency in Singapore takes less than a year with high recovery rate Resolving Insolvency rank Economy Rank DTF Recovery rate (cents on the dollar) Time (years) Cost (% of estate) Outcome (0 as piecemeal sale and 1 as going concern) Strength of insolvency framework index (0 16) Commencement of proceedings index (0 3) Management of debtor's assets index (0 6) Finland Japan Korea, Rep Australia Hong Kong SAR Singapore Malaysia Thailand Philippines China Indonesia Cambodia Brunei Darussalam Vietnam India Myanmar Liberia Lao PDR no practice no practice no practice Timor Leste no practice no practice no practice Reorganization proceedings index (0 3) Creditor participation index (0 4) Resolving Insolvency This topic identifies weaknesses in existing insolvency law and the main procedural and administrative bottlenecks in the insolvency process. The most recent round of data collection for the project was completed in June Resolving Insolvency in Singapore Resolving insolvency in Singapore takes less than a year with high recovery rate. Note: (*) An economy s distance to frontier score is indicated on a scale from 0 to 100, where 0 represents the worst performance and 100 the frontier Source: Doing Business 2016: Measuring Regulatory Quality and Efficiency Charting Economy CC BY-NC-ND

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