ECONOMY | Staff Reporter, Singapore

Singapore's GDP expected to rise by 3% in 2018: report

Total business expenditure commitments amounted to $6.5b.

Singapore’s gross domestic product (GDP) is expected to grow by between 3% to 3.5% in 2018 amidst risks of further escalating trade tensions and disorderly capital outflows in some emerging market economies, according to the latest Singapore Public Sector Outcomes report.

It noted how Singapore remained highly ranked amongst the world’s most competitive economies, coming in at 2nd place in the World Economic Forum’s global competitiveness report 2018 and the World Bank’s ease of doing business ranking for 2018. It also ranked third out of 63 economies in the International Institute for Management Development's world competitiveness yearbook 2018.

Also read: Singapore ranked fifth in Global Power City Index

The growth is primarily supported by outward-oriented sectors such as manufacturing, the report underlined.

“Singapore’s push for productivity has seen results, but gains have been uneven across sectors,” the report highlighted. Growth in real value added (VA) per actual hour worked increased from 1.4% in 2013 to 4.5% in 2017, whilst growth in real VA per worker picked up from 1% to 3.8% over the same period.

In terms of real VA per actual hour worked, the 6.8% productivity growth of outward-oriented sectors continued to outperform the performance of domestically-oriented sectors which contracted -0.1% in 2017.

With regards to foreign investment levels in Singapore, the report noted that performance remained healthy with the Economic Development Board (EDB) bringing in $9.4b of fixed asset investment commitments.

“Total business expenditure commitments amounted to $6.5b,” the report stated. “These projects are expected to create 22,500 jobs and contribute $17b of VA per annum to our economy.”

Also read: Singapore ranks first in total FDI capital investments in 2017

As of end 2017, overall employee training participation rate hit 47.9% with over 285,000 eligible Singaporeans using their SkillsFuture Credit which was launched in January 2016. In addition, the Adapt & Grow initiative was observed to have helped more than 25,000 jobseekers secure jobs in 2017 which is 20% higher than in 2016. Close to 3,800 professionals, managers, executives and technicians (PMETs) also received training and wage support to move into new occupations or sectors thanks to the country’s 100 professional conversion programmes (PCPs) which can be found in more than 30 sectors.

Meanwhile, growth in the consumer price index (CPI)-all items turned positive in 2017 after two consecutive years of negative inflation, the report added, driven mainly by price increases in transport and food which were partially offset by cost declines in housing and utilities.

The report noted how the Monetary Authority of Singapore’s (MAS) core inflation measure rose from 0.9% in 2016 to 1.5% in 2017, though it excludes the costs of accommodation and private road transport.

Also read: Singapore inflation expectations for 2019 falls to 2.88%

“With the projected modest increase in core inflation amidst continued economic expansion, MAS undertook a slight tightening of monetary policy in April and October 2018 after keeping to a 0% slope of the Singapore dollar nominal effective exchange rate policy band for two years,” the report noted.

In industry, the report noted that all 23 Industry Transformation Maps across six clusters have been launched, with the next phase of transformation looking at synergies within industry clusters.

Ease of doing business has also improved after the business grants portal was launched in which companies can use the platform to directly apply for six grants from five agencies. Likewise, the LicenceOne portal was developed in a bid to simplify the application process for 114 licences from 20 agencies.

“Sustaining growth is necessary to keep wages growing in the medium to long term,” the report highlighted. “Singaporeans are earning higher incomes with full-time employed Singaporeans at the 20th percentile and median income levels earning $2,095 and $4,050 respectively in 2017.”

Households also saw their monthly incomes rise, with those at the 20th percentile and median income levels racking in $1,225 and $2,535 per household member respectively in 2017. This represents a cumulative increase of approximately 20% in real terms since 2013, the report stated.

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