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Assess the economic performance of Singapore from 2016 to 2017
The aims of the government are seen in terms of price stability, low unemployment, economic growth and external equilibrium. In order to examine whether Singapore has been able to achieve the aims of government from 2016 to 2017, there is a need to assess the economic performance of Singapore during the same period. The economic performance of Singapore can be measured by assessing the unemployment rate, consumer price index, exchange-rate variation, level of investment, level of balance of trade and sectoral performance of Singapore.
First, the GDP growth rate or the value of the GDP will reflect the level of production capacity which measures the monetary level of the total goods and services produced within Singapore. This will reflect the productivity of the economy as the comparison is made over a previous year.
Second, the consumer price index will reflect the level of price stability in Singapore as a rise in the consumer price index would mean the economy is experiencing inflation and it may undermine the economy from attaining sustainable economic growth as the economy will experience rising cost condition.
The unemployment rate can also help to assess the economic performance of Singapore as the rate of utilization of resources will mean that the economy attained the production efficiency as it has produced on the production possibility curve. Therefore, if Singapore employment rate from 2016-2017 is low, it will indicate that her economy has attained production efficiency which indicates that Singapore economy from 2016 to 2017 is doing well.
Additionally, the sectoral analysis will reveal the scope of economic development as it will reveal the areas of specialization of the Singapore economy and its extent of depth of the development of the economy. This can be seen by examining the percentage of contribution of each sector to the GDP and the extent of growth the sector over time.
The level of investment in Singapore can also assess the economic performance, especially in an open economy such as Singapore, the foreign direct investment will raise production, leading to higher level of national income and employment. Higher level of investment in the areas of infrastructural development and research and development will expand the mobility of resources and efficiency in production and thus, expanding potential growth and raising actual production.
Lastly, the level of balance of trade is critical in the examination of international economic performance, especially for export-oriented country like Singapore which rely extensively on external trade for growth. Balance of trade surplus would mean that there is a higher level of export demand which will induce a higher of local production that will raise national income and employment. When the total trade in proportion to the GDP increase, it implies that the Singapore’s economy resource and production capacity has expanded which will be an indication of economic growth for countries which rely extensively on trade for growth.
The positive and negative effects of the indicators will allow us to analyse the economic performance of Singapore.
In 2017 the GDP growth rate showed a positive effect of the indicators as Singapore GDP grew 3.5 percent. As such, this shows that there is an increase in the level of production capacity which will indicate a positive economic performance in 2017. Similarly, the unemployment rates in Singapore showed a positive effect of the indicator as unemployment rate have remained low in 2017 at 3%. As such, there is a greater employment utilization of resources. Hence, the production efficiency in Singapore in the year 2017 is attained.
Furthermore, Singapore achieved a record high US$229 million Fintech (Financial Technology) funding in 2017 which indicates a higher level of investment in Singapore. Therefore, the higher level of investment will indicate the positive effect on the indicators since the increase in investment will raise production, leading to higher level of national income and employment.
Moreover, Singapore’s balance of trade is in surplus where it amounted to 45.55 billion US dollars in 2017. Hence, as stated earlier, the balance of trade surplus will indicate that there is a higher level of export demand which will induce a higher of local production that will raise national income and employment. As a result, this shows a positive effect of the indicator.
The consumer price index rose 0.6 per cent in 2017 which may imply that Singapore economy is experiencing rising cost condition hence showing a negative effect of the indicators. However, the rise in the consumer price is very mild which can imply that the percentage of price level did not rise above the percentage increase in GDP. Hence this will still reflect a stability in price level in the economy hence in turn, shows a positive effect on the indicator.
In conclusion, economic performance of Singapore can be analysed with the help of the economic indicator. Since in the year 2017, the economic indicators showed a positive effect when analysed Singapore’s performance, this implies that Singapore has a positive economic performance.