Singapore's Economy Essay

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Singapore’s recent economic history Singapore is well located for international industry and trading. The development of the Singapore economy depends heavily on foreign capital, foreign technology and foreign workers. Foreign companies are attracted by an interesting tax system. The foreign investors profit from the fact that they pay lower tax rates than local residents. The Singaporean government has a big influence on the social and economic development. The authorities organized for example trainings for Singaporean workers in order to obtain trained, highly motivated residents. This resulted in the fact that nominal wages raised and unemployment declined.…show more content…
In every sector the GPD increased. Except in the ‘goods producing industries’ the construction sector faced a small recession in 2003 and 2004. After 2004, the GDP in the construction sector increased compared to 2002 and 2003¹. Inflation Year CPI GDP Deflator 2002 97.8 % 97.0 % 2003 98.3 % 96.0 % 2004 100.0 % 99.6 % 2005 100.4 % 99.1 % 2006 101.4 % 100.1 % (Source: Yearbook of Statistics Singapore, 2007, page 20) Singapore faced some inflation from 2002 till 2006 although the inflation is not that remarkable, there are some causes that influenced the inflation. The most important cause for inflation is the risen price of oil worldwide. In 2003 SARS contributed to the inflation, there was an increase in the demand for medical supplies as well the restaurant, retail and travel- related industries experienced a recession. Products such as tobacco and liquor are heavily taxed to discourage consumption², this causes inflation as well. Additionally, high global commodity prices and as well firm wage and rental costs domestically determined the inflation. The primary governmental objective in Singapore is to promote low inflation in order to obtain economic growth. A number of central banks have introduced what can be called ‘’inflation target regimes.’’² . ¹ Yearbook of Statistics Singapore, 2007, page 76 ² MAS Occasional Paper No. 10, December
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