Economic Analysis of Singapore

Running head: ECONOMIC ANALYSIS OF SINGAPORE
Economic Analysis of Singapore
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ECONOMIC ANALYSIS OF SINGAPORE1
Contents
Introduction:....................................................................................................................................2
Production Output Performance Analysis.......................................................................................2
Labour Market Analysis..................................................................................................................6
Price Level Analysis........................................................................................................................7
Conclusion.......................................................................................................................................9

ECONOMIC ANALYSIS OF SINGAPORE2
Introduction:
Singapore is an Asian nation with highly developed free-market economy. According to
purchasing power parity, Singapore has 39th highest GDP and the 3rd highest per capita GDP
(Nguyen, 2014). Singapore has not much land area which makes it poor in natural resources. In
Singapore, the categories of natural resources are the renewable resources, non-renewable
resources and water resources. In spite of this constraints, industries are growing as the
government of Singapore has taken initiatives to invest in infrastructure, upgradation of
technologies, conservation and management of water and strategies to manage water resources.
The main industries of Singapore are electronics, chemical, financial services, oil drilling
equipment, ship repair, offshore construction etc. the nonrenewable resources of Singapore are
coal, oil and natural gas which is available in very limit (Chiu, 2018). The economy of Singapore
was dependent on oil imports. To get rid of the problem of fuel oil imports, Singapore have
moved to natural gas which generates 80 percent of electricity. Singapore use biomass as a
source of renewable energy. Source of biomass energy is wood, animal waste and crops. Except
these all renewable resources, geographical location of Singapore which is in the equatorial belt,
makes Singapore potential to tap solar energy.
Production Output Performance Analysis
Real GDP, Real GDP growth and Real GDP per capita measures the performance of
product output of an economy. GDP is defined as the amount of total finished goods and services
produced in an economy within a certain period. There are two types of GDP: Nominal GDP and
Real GDP. The difference between these two GDPs is price adjustment. Price adjusted GDP is
called Real GDP. GDP growth is defined as the change in growth over time. If the economy is
growing, then the GDP growth rate is positive. Real GDP growth is inflation adjusted growth

ECONOMIC ANALYSIS OF SINGAPORE3
rated. Real GDP shows the growth of an economy by adjusting the inflation which makes it
better measurement than nominal GDP growth rate. GDP per capita is determined by the division
of GDP of an economy by the population of that economy. It measures the output of an economy
which is accounted for the population of that economy. Thus it is the best measurement for the
standard of living of an economy (Laubach & Williams, 2016). GDP is influenced by several
factors that are explained below:
Human Resource: The efficiency and availability of human resource directly affect the GDP of
an economy. The efficient labour produces more product than a normal labour. Similarly,
available labour increases the total output.
Natural Resources: Availability of natural resources helps to produce large amount of aggregate
output. Countries with enough natural resources like oil, natural gas and minerals produce more
goods than a country lacking with the natural resource. The efficient utilization of resources
depends on proper use of upgraded technology and skilled labour.
Capital Formation: Capital of a country includes the land, building, machines and
transportation. Production and utilization of these capital is called capital formation. Capital
formation increases the availability of per capita capital and capital labour ratio. This will raise
the productivity of a labour.
Advance Technology: Technology is a result off application of scientific methods and
production techniques. An upgrade in technology results in the rise of output with the use of
same amount of input. The right technology in right place have a great role in the growth of
GDP.