Economic Analysis
Singapore has a diverse economy. In 1998 it’s gross domestic product ( GDP ) is $84000000000 (S$142451000000 ). Compared with world standards, Singapore’s economy is insignificant. However, in 1998, the it’s per capita gross national product ( GNP ) is $22800 (S$38169), Singapore has been one of the richest countries in the world. Achievements are mainly attributed to the open economy. Singapore's trade amounted to 2 times of the GDP in 1998, foreign investment totaled $3100000000 (S$ 5213500000).
In the first half of 2003, effected by the Iraq war and " SARS " and the low market demand from Europe, USA, Japan, Singapore’s economy presents is weakening. The growth of the first quarter of GDP was 1.7% compared with last year. The second quarter was dropped to 3.9%, the economy in the first half overall decline 1.3%, leading to the Singapore government has lowered its annual economic forecast again and again. The government of Singapore at the beginning of the year is estimated to have an annual economic growth between 2.5% and 5%, and May has economic growth target reduced to 1.5-2.5%, after the publication of economic statistics of the second quarter, annual economic growth is expected to be down to 0-1%.
In the second half of the year, the global demand for electronic products were getting strong – the economy of the United States of America was getting better , external demand is growing, coupled with the service industry was quickly restored after " SARS ",which made economic grow 1.7% in the third quarter. Compared with the second quarter ,Q3 was growing 17%. Fourth quarter economic performance is beyond all expectations, the growth rate were as high as 4.9%. Driven by the second half of a stronger economy, in 2003 the annual Singapore economy achieved a growth rate of 1.1%, not only better than the estimated which was made at the end of the year 0.8% growth, but also beyond the government 's 0-1% growth range.
The motivation of economic growth mainly comes from the external demand:
In 2003 Singapore total demand has a growth of 3.9%, better than 2% growth of the last year. However the difference between domestic and foreign demand is very big, the external demand was strong, domestic demand was weak. Driven by electronic products and biological medicine exports increase, external demand growth 9.5%, compared with 3.6% in 2002 rose nearly three times. Meanwhile the domestic demand was getting worse, fell by 1.7% in 2002, continue to declined by 9.6%, which the personal consumption was declined by 0.5%.It was mainly because during the SARS time dweller consumption abroad dropped sharply and consumer demand for financial services is reduced. At the same time as the government and private institutions have less investment on architecture and engineering,which set-off private investments grow in traffic tools, machinery and equipment and made the investments in fixed asset continued to decrease, fall 3.8%, but were much better than last year which droped 9.9% .
