2013 Economic Review of Singapore

Jan 20, 2014 | Valerie Wong

Things are looking bright for Singapore, unlike neighboring countries whose initial promise was met with disappointment. By the latter half of 2013, Singapore's economy had already grown by 3.7%, which was a better growth than initially projected. The Gross Domestic Product or GDP forecast remains on track as 2014 rolls around, according to Singapore Prime Minister Lee Hsien Loong. As long as the growth is between 2% to 4%, Singapore's economy is still on the black instead of in the red. Of course, the PM admits that there have been some "rough spots" during Singapore's climb to the top, testing the country's resilience as a whole.

Regardless, PM Lee claims that Singaporeans were able to face the challenges as one nation bravely and superbly. The 2013 GDP growth of Singapore was in light with the revised forecast of the government (3.5% to 4%), and this meant good news for the hard Singaporean workers out there. The pay for the lower-income group has grown just as the median salaries rose by 3.9%. What this means is that, like before, Singapore is a country that as plenty of job opportunities for workers, and even in the face of restructuring, the improving economy ensures that these are new and better work opportunities at that.

The Caveat of Singapore's Continuing Growth

The main caveat to Singapore's continuous growth is the performances of American and European economies and how they affect the country's economy. These external factors that Singaporeans have no control over can truly do a number to the nation. With that said, these aren't the only things Singapore should be worried about. The longstanding territorial dispute in Northeast Asia over territories within the South China Sea continue to pose challenges to Southeast Asian countries in terms of scaring away investors, especially since tensions and problems persist in that area even while the Asian economic outlook remains positive.

The 2014 prospects for Singapore remain positive thanks to a robust external economic environment. On the other hand, Singapore also has its share of troubling internal factors that can affect the economy, like the recent Little India riot (which Prime Minister Lee calls "inexcusable"). Even though the PM claims that foreign workers will still be treated fairly after the incident, he insists that they should learn to "obey the laws and social norms" of Singapore since they're working there. An inquiry on how the incident happened and how the country can prevent such events from happening in the future should come about sooner rather than later.

Later Reports Further Showcased a Strong Singaporean Economy

By the end of the year, when everything was said and done, Singapore was able to go further than the (better than expected) 3.7% growth and end up with a 4.4% economic growth altogether on a year-on-year basis as reports on Singapore's successful fourth quarter for 2013 rolled in. As predicted by the PM, as the global economy picked up, so did Singapore's economy. The economic outlook for 2014 remains bright, even though some excitable economists who claimed that Singapore should've gotten a 4.8% growth were "disappointed" by the actual numbers that fell below their overly optimistic expectations.

Singapore is reaping the benefits of the economic recovery of China, Europe, and the U.S. According to Mizuho Bank's senior economist, Vishnu Varathan, even though the economy of Singapore is currently doing a one step back, two steps forward kind of deal, it remains the global economy's barometer of health. The Singaporean economy's growth has gained enough of a momentum towards getting the 4% to 5% growth range, at that. Other factors showcasing Singaporean growth doing the "Cha-Cha" include a 3.5% expansion by the manufacturing sector (which got a bigger 5.3% boost in the third quarter of 2013). The slowdown was mainly because of the fall of biomedical manufacturing and a slower transport engineering growth pace.

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