Economic Analysis of Singapore: Production Output, Unemployment, and Inflation

ECONOMICS
SINGAPORE
STUDENT ID:
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TABLE OF CONTENTS
Introduction......................................................................................................................2
Production Output Performance - Trends.........................................................................2
Production Output Performance – Indicators and Definition................................................4
Production Output Performance – Trends Explanation........................................................5
Production Output Performance – Measures taken by government.......................................5
Labor Market Analysis..................................................................................................... 5
Unemployment – Definition and Type...............................................................................6
Unemployment types in Singapore....................................................................................6
Unemployment – Measures taken by the government.........................................................7
Price Level Analysis..........................................................................................................7
Inflation – Definition and Causes......................................................................................8
Inflation Analysis – Causes in Singapore...........................................................................8
Measures for inflation control...........................................................................................9
Conclusion........................................................................................................................ 9
Reference........................................................................................................................10
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Introduction
Singapore is a small country located in Asia with the tag of a developed nation. The country has
an open economy which is driven by trade and global investment as the country is one of the
major financial hubs in Asia. The country has one of the highest per capita GDP which stands at
USD 57,714 in 2017. Singapore’s economy is services driven considering that nearly three
fourth of the nation’s GDP is derived from this sector and the remaining one fourth being
attributed to the industrial sector. The inflation and the unemployment in the country continue to
be quite slow owing to economic development coupled with prudent governance. The country
has a significant dependence on trade which is evident from the trade to GDP ratio that is the
highest in the world and exceeds 4. Additionally, the country has a trade surplus as most of the
imports are low end goods while the exports are services along with capital goods (Tan, 2015).
The country also is a beneficiary of foreign investments with an estimated USD 60 billion in
2016-2017. Considering the description of Singapore’s economy given above, this report tends
to focus on the analysis of the inflation trend, labour market trend coupled with production
output trend for 10 years i.e. the period from 2008 to 2017. In order to analyse the above, the
statistics corresponding to the ten year period has been considered.
Production Output Performance - Trends
The real GDP trend for the period 2008-2017 is captured using the following line graph
(TradingEconomics, 2018).
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The graph above highlights that the highest real GDP has been realised by Singapore in 2017
when it exceeded SGD 110 billion. The lowest real GDP was realised in 2009 owing to the
impact of global financial crisis. Considering the vast dependence of the country on trade, the
significant impact on GDP was on expected lines. However, from 2010 onwards the economy
has been on a uptrend with the real GDP witnessing a growth of over 60%during the 2010-2017
period.
The growth rate with regards to real GDP of Singapore for the given time period of 2008-2017 is
illustrated as follows (TradingEconomics, 2018).
It is apparent that during the period between 2008 and 2010, there was turbulence with regards to
GDP growth in Singapore. During the 2008-2009 period, there were quarters where the GDP
contracted by more than 10% but this was compensated in 2010 when the economy grew very
rapidly owing to the measures taken by the government during the global financial crisis. From
2011, there has been a general stability in growth as it is limited to a narrow range with limited
incidence of any major surprises on either side.
The GDP per capita for Singapore corresponding to the period 2008-2017 is illustrated as
follows (TradingEconomics, 2018).
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