Economic Performance of Singapore Report 2022

Running head: Economic Performance of Singapore
Economic Performance of Singapore
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1Economic Performance of Singapore
Table of Contents
Introduction......................................................................................................................................2
Production Output Performance......................................................................................................2
Unemployment................................................................................................................................4
Price Level Analysis........................................................................................................................6
Conclusion.......................................................................................................................................8
Reference.........................................................................................................................................9

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Introduction
Germany is a country in Europe, which is regarded as global business centre. Like any
other country in Germany important industries are agriculture, manufacturing and service
industry. However, the as the country is highly urbanized the agriculture production is low and
the corresponding industry is thus weak in the country and thus its contribution in the country’s
GDP is negligible and close to zero, in 2018 the share was recorded at 0.7%. On the other hand it
is found that the industry is the largest industry of the country with 68.2% share of GDP in 2018.
Additionally, the manufacturing sector is the second largest industry in the country with 25.8 %
contribution to the GDP. The main products that are produced in Germany are vehicles,
electronic product, machinery, chemicals and pharmaceutical products. All the mentioned
product are part of export sector of the country and shares significant amount of the export
revenue generated. Export sector of Germany is visibly significant as it generates 47.24% of
GDP of the country in 2017. The top 5 countries in which Germany makes the most exports are
China, France, the United States, Netherlands and Italy. Germany is one of the advanced
countries and the economic performance of the country has been good for about last ten years.
Production Output Performance
Assessing performance of a country based on its productivity requires focus on annual
produce of final goods and services of the country. Thus, the idea of actual performance of
production of a country can be realised by analysing the real GDP as it is adjusted by the
inflation rate (Feldstein, 2017). Real GDP is the measure of GDP that reflects the actual amount
of production of a country since it is obtained by doing division of nominal GDP by GDP
deflator. Elimination of effect of inflation from the nominal GDP is important because reflection
of inflation in a production data gives an over estimated value.

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In graph 1, it can be seen that GDP of Germany has performed well in the last ten years.
According to the graph the GDP of the country has increased gradually with every passing year
except the recession phase of 2008-2009. In 2008, the GDP of the country was over €700 billion
and after that it has gradually increased and the reached close to €820 billion in 2018. However,
in 2008-2009 recession phase the GDP of the country fell drastically close to €650 billion
(Heilemann, & Schnorr-Bäcker, 2017). Moreover, during eh period from 2008 to 2018 the
average inflation rate of the country is found below 2% and consequently it can be inferred that
Germany has recovered well from the recession condition as the value of GDP has grown by
over 25%. The trend line in the graph and thus supporting the statement that the country has
grown from 2008 to 2018.
Graph 1: GDP of
Germany (Billion Euro)
Source: (Tradingeconomics.com, 2019)
To achieve the growth rate and increase the productivity of Germany has taken various
measures that might have contributed positively on the country’s economy. Thus, the actions
implemented by the government had good effect on the economy of the country. It is evident
from the above graph. The commendable task that the government of Germany did was pulling
the court up from that pit of recession. After the recession the measures of the government
increases the GDP of the country, and the country grew at faster rate. The growth of the

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economy of Germany depends on the performance of the major sectors of the country and
mainly on the manufacturing and service industry. Both these sectors together contribute more
than the 60% of the GDP of the country. These two sectors has grown over the years and along
with that the country has grown too. On the other hand, the adverse effects that occurred to
Germany due to 2008-2009 recession was not due to the increase in debt or financial crunch but
due to the increase in unemployment rate (Rossi & Malavasi, 2016). However, the effect of
recession was short lived in Germany and it completely ended with the advent of 2011.
However, the measures that Germany had taken to improve the condition of the economy are the
macroeconomic policies. Expansionary policies could be monetary or fiscal. Under expansionary
monetary policy the government takes the assistance of the central bank in order to implement
monetary policy and thus thereby increases the money supply in the economy by reducing
interest rate and buy back of government bonds (Walsh 2017). Further, under fiscal policy the
government cut tax rate and increases subsidy rate and thereby money flow in the economy
increases and thereby aggregate demand of the economy increases and thus with induced effect
the economy of the country grows (Lorenzo and Sachs 2016). Thus, with these policies the
economy of Germany recovers from the recessionary phase.
Unemployment
In an economy there are number of persons that participates to work and all these
participating person are considered as the total workforce. In this total workforce, not all the
persons get jobs. Therefore, this condition of the participating persons of the workforce is termed
as unemployment. Unemployment causes due to various reasons and based on the reason of
unemployment it is categorised. There are five kinds of unemployment rate that are found in an
economy. The classes of unemployment rate are frictional, structural, seasonal, technological and

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cyclical unemployment. Structural unemployment is the kind of unemployment that occurs when
there is incompatibility between the skills of available workers and the available jobs in an
economy (Enderwick et al., 2015). For example if there is a company that requires computer
engineers but the available workers are mechanical engineers then there will be unemployment
in the economy giving rise to structural unemployment. Frictional unemployment occurs while a
working person resigns from a job in pursuit of a better job and remain unemployed for a short
period. A person when switches between two jobs then the transition phase is also considered
under frictional unemployment. Additionally, cyclical unemployment is the category of
unemployment that considers the unemployed persons those are not getting job due mismatch
between demands for jobs and supply of jobs (Mueller, 2017). Therefore, when there is more
number of available workers than that of available jobs then there will be unemployment and that
is termed as cyclical unemployment. Seasonal unemployment is the kind of unemployment that
occurs when the season of job is over and there is no more work to do (Kaplan, Collins &
Tylavsky, 2017). This kind of unemployment is visible in agriculture sector when a season of
crop is over then the farmers associated with cultivation of that particular crop becomes
unemployed and remain in the same situation until the next season comes. Technological
unemployment is the kind of unemployment that happens owing to the sudden change in the
technology in the business
sector or introduction of
machineries that reduces
requirement of workers in the
economy and causes
unemployment.

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Graph 2: Unemployment rate in Germany
Source: (Tradingeconomics.com, 2019)
From graph 2 it can be inferred in terms of unemployment rate that Germany has done a
commendable task. In 2008, the unemployment rate in Germany was just few points short from
8% mark. However, after 2008 the unemployment rate of the country declined drastically and
reached just close to 3% unemployment rate in 2018. Therefore, in the last 10 years period,
Germany has performed well in terms of unemployment and it evident from the steep downward
sloping trend line of unemployment. The kind of unemployment that persist in Germany are
frictional, structural and cyclical unemployment (Klinger &Weber, 2016). Germany has already
low level of unemployment thus no new measure is required now the reduce unemployment but
to keep the country at low unemployment rate the government should keep on providing
education to the workers about the changing market such that the worker updates itself and stay
employed.
Price Level Analysis
Inflation is the economic phenomena that describes the increase in price of final goods
and services manufactured and available in an economy. Inflation can occur due to various
reasons namely surge in demand for goods and services, surge in production cost due to rise in
price of factors of production, unavailability of sufficient production factors and due
exclusiveness of good (Bernanke et al., 2018). The causes of inflation thus are of two kinds one

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is demand pull inflation and the other is cost push inflation. Graph 3 shows the 10 years trend of
inflation rate of Germany from 2008 to 2018. The average rate inflation in the last ten years is
thus ranged from 1% to 1.5%. In 2008, the inflate rate in Germany was recorded at around 3%
and in 2018 the inflation rate was at about 1.8%. Therefore, there was a fall in inflation rate in eh
period of 10 years and the flat but downward sloping trend line supports the notion of fall in
inflation. The path of fall in inflation rate in Germany was however much skewed and in 2008
during the period of economic recession, the rate of inflation fell below 0%. In 2015, the
inflation rate fell below 0% for the second time in the last ten years. Thus, Germany went
through deflationary phase for two times. Therefore. It can be inferred that Germany has never
experienced sever inflation in the said period. Therefore, it never needed policies to pull the
inflation down as it had never went out of control at the higher level but at the lower level it
needed policies to increase the inflation rate to a stable rate.
Graph 3: Inflation
rate in Germany
Source: (Tradingeconomics.com, 2019)
The inflation rate of Germany in has been significantly low during 2008 to 2018 and the
trend line is downward sloping and thus indicates that the inflation rate of the country may

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further fall in below the average rate. Thus, the probable cause of low inflation rate in Germany
could be slow economic growth, low increment in wage growth and stagnant demand for goods
and services and therefore causes inflation to fall (Lawrence, 2017). The low inflation are of
Germany can be increased to normal level by implementing policies that would either causes
demand pull inflation or cost push inflation (Gali, 2018). For example, if the government
increases the money supply of the economy by implementation of expansionary monetary or
fiscal policy then the income of people rise and thereby consumption rises (Malmendier &
Nager, 2015). With induced effect the aggregate demand of the economy rises and causes
inflation to rise. This type of inflation rate is terms as demand pull inflation. On the other hand,
the cost push inflation causes due to sudden fall in supply of product (Johnston & Regan 2016).
A fall in supply of crude oil will reduces the supply of petrol and thereby demand and supply
mismatch occurs and price of oil rises. Thus, this kind of inflation is called cost push inflation
Conclusion
The above discussion of economic performance of Germany based on three factors that is
gross domestic product, inflation and unemployment rate leads to the inference that Germany as
an economy has performed fairly well because it is obvious from the data in graphs that GDP of
the country has improved with time. The unemployment rate of the country has also declined
from 2008 to 2018. It suggest that the job opportunity of the country has improved over the
years. The inflation rate remained at low level but it is unhealthy for the economy as it is making
the economy more stagnant. While analysing the above said factors it has been observed that the
government of Germany has kept the growth of the economy stable but some polices are still
needed to stabilize the economy of the country. Hence, it can overall be inferred that the
economy of Germany is a good performer.

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Reference
Bernanke, B. S., Laubach, T., Mishkin, F. S., & Posen, A. S. (2018). Inflation targeting: lessons
from the international experience. Princeton University Press.
Enderwick, P., Manzetti, L., Mavrotas, G., Shorrocks, A., & Motamen-Samadian, S. (2015).
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Feldstein, M. (2017). Underestimating the real growth of GDP, personal income, and
productivity. Journal of Economic Perspectives, 31(2), 145-64.
Galí, J. (2015). Monetary policy, inflation, and the business cycle: an introduction to the new
Keynesian framework and its applications. Princeton University Press.
Heilemann, U., & Schnorr-Bäcker, S. (2017). Could the start of the German recession 2008–
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Nationalökonomie und Statistik, 237(1), 29-62.
Johnston, A., & Regan, A. (2016). European monetary integration and the incompatibility of
national varieties of capitalism. JCMS: Journal of Common Market Studies, 54(2), 318-
336.
Kaplan, E. K., Collins, C. A., & Tylavsky, F. A. (2017). Cyclical unemployment and infant
health. Economics & Human Biology, 27, 281-288.

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Klinger, S., & Weber, E. (2016). Detecting unemployment hysteresis: A simultaneous
unobserved components model with Markov switching. Economics Letters, 144, 115-
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Lawrence, P. (2017). Managers and management in West Germany. Routledge.
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665.
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Walsh, C. E. (2017). Monetary theory and policy. MIT press.