Economics Assignment on GDP and Economic Growth of Singapore

Running head: ECONOMICS ASSIGNMENT
Economics Assignment
Name of the Student
Name of the University
Author Note

1ECONOMICS ASSIGNMENT
Table of Contents
Introduction..............................................................................................................................2
Economic Conceptual Framework and Models........................................................................2
Scenario in the economy of Singapore....................................................................................3
Conclusion...............................................................................................................................7
References...............................................................................................................................8
Appendix..................................................................................................................................9

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Introduction
The global economic scenario as well as the economic performance of different
countries depend considerably on the macroeconomic trends and activities in the same over
the time. In this context, the report discusses the GDP and economic growth aspects of an
impressively growing economy in the contemporary global economic scenario, which is the
economy of Singapore, with the help of the news article named, “Singapore economy
edges past estimate, growth broadens”, published on May 24th, 2018 (Asia.nikkei.com,
2018).
As per the assertions of the article, the economy of Singapore, in spite of the
presence of the global trade disturbances and high market risks in the recent period, has
shown significant growth and increased confidence trends. The forecast of the GDP growth
for the concerned country in the current year is between 2.5% to 3.5%, which is greater than
the previous forecast. The article also points out at the high actual growth rate of the GDP of
the country in the recent quarter, the rate being 4.4%, despite of the slowdown of China, the
largest market of the country and the problems faced by Singapore in its international trade
relations with the USA (Mander, 2014). The article attributes this high growth rate of GDP to
the resilient demand and growing production and technology sector of the country. The
electronic boom has also contributed in the growth of the factories of the country along with
an increase in the related demands, which in turn has contributed in increasing the current
GDP as well as the future forecast of the same. The growth in the service sector (4.1%) and
the finance and insurance sector (9.1%) have also contributed to this increase, which is
expected to rise even more with the construction sector gaining back its impetus.
Economic Conceptual Framework and Models
As can be seen from the assertions put forward by the concerned news article, the
GDP of Singapore has been increasing impressively in the recent time period and the
economy has been experiencing both positive as well as negative dynamics in its different
sectors, both internal as well as external, which are expected to have their influence on the
GDP and the economic growth of the country in the future (Mankiw, 2014).
The term Gross Domestic Product, being an indicator of the economic growth of a
country, is the money value of final services and goods which are produced in the country
itself, within usually one year (Burda & Wyplosz, 2013). This in turn shows the overall
productivity and its dynamics in the country with time, which in turn helps in understanding
the condition of the economy as a whole, reflecting on the economic abundance enjoyed by
the population of the country, the employment scenario as well as the consumption and
expenditure patterns of the population of the country.

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The GDP of a country and its dynamics can be explained with the help of one of the
most widely used models of macroeconomic conceptual framework which is the Aggregate
Demand-Aggregate Supply Model. In this model, the Real GDP of the country is determined
as the Aggregate Supply while the aggregate demand is made up of different components.
AD = C+I+G+NX.
Here, C denotes the consumption expenditure, G shows the expenditures done by the
government of the country, I stand for the investments in the economy and NX shows the net
exports (Export volume – Import volume) in the country. The increase in these components
lead to an increase in the AD which in turn leads to an expansion in the GDP of the country.
On the other hand, in this model, an increase in AS also leads to an increase in the GDP of
the country (Johnson, 2017).
The GDP however, does not show the average economic well-being of each of the
individuals of the economy, which in turn is highlighted to some extent by the per-capita
GDP, which shows the per head average economic abundance or income of the residents of
a country at a point of time.
Scenario in the economy of Singapore
As can be seen from the news article considered, the economy of Singapore has been
showing an increase in GDP in recent period, which is evident from the following figure,
showing the GDP dynamics over the last few years:
Figure 1: GDP of Singapore in the last few years
(Source: Tradingeconomics.com, 2018)
The GDP of Singapore has been increasing impressively over the last few years,
which in turn indicates towards an overall robust growth of the concerned economy. This can