While Singapore domestic market is relatively small, its economy is greatly engaged in the international market. The economy is ranked 2nd most open economy in the world by The Heritage Foundation’s Index of Economic Freedom. The jurisdiction is one of the most stable nations with zero foreign debt and very high government revenue.
During the great recession of 1997, Singapore remained relatively stable as neighboring countries and others in the globe suffered serious recessions. After the 2008 financial crisis, Singapore was least affected as other highly developed countries struggled with the problem.
The main drivers of Singapore economy are:
- Very large cargo sea port
- Financial services
- Electronics and machinery manufacturing
The key Singapore industries
The manufacturing niche contributes about 30% of the GDP annually. The main manufacturing industries include electronics, chemicals, pharmaceuticals, construction, and ship building. In 2012, the manufacturing sector in the country demonstrated great resilience because of the bio medical and pharmaceutical niches.
It is important to mention the financial industry in the country at this point. The country’s business-driven environment and politicalstability have made it a financial and investment hub. This model has allowed knowledge, skills, and technology transfer to the local market to spur growth. You can anticipate every big bank in the US or Europe has a branch in Singapore.
Other notable industries helping to shape the economy include the health-care, casinos, education, media, and Infocomm. Here is a table representing Singapore GDP by industry.
Singapore is positioned at the southern end of the Malaysian peninsula. It has a landmass smaller than New York and has no significant natural resources. This means that the country has to make inroads for natural resources from other countries. For example, it has the third biggest oil refinery that mainly processes crude oil from Saudi Arabia.
Because of this lack of resources, many people have indicated that the greatest natural resource for Singapore is its people. The country has a very educated labor force that attracts international companies that contribute to economic growth.
During the colonial era, Singapore acted as a military and commercial seaport. This means that its infrastructure was well developed even before other neighboring and bigger nations. After gaining independence, the government continued to improve the infrastructure such as communication, housing system, and industries.
The country has a total of 3,297 kilometers of well-tarmacked highways and 138.2 kilometers of the railway line. Other notable infrastructure includes the Changi International Airport that connects to 182 cities, the Port of Singapore, and highly developed telecommunication network.
Singapore GDP, trade, and investment
Bloomberg reports that Singapore economy grew by 4.9% in 2011. Its GDP was $326.8 billion according to Bloomberg Report. However, this rate slowed down to less than 2.5% in 2012 following the Eurozone Crisis and sluggish US growth. By the first quarter of 2017, the GDP growth remained at 2.5%.
Singapore was recently ranked the 3rd wealthiest country in the globe. The country managed to reach this coveted position because of sustained investment inflows in different industries.
By 2014, the total Singapore trade was $982 billion. Even though it is one of the smallest nations, the country is the 5th-largest trading partner of the US. Singapore exports totaled $519 billion with Malaysia taking 18% of all imports.
Singapore is one of the most robust economies for investors who want to get a Launchpad for their enterprises. As a financial hub with subtle tax and related incentives, the jurisdiction is a great option for offshore banking.