The following is an excerpt of an article first published in East Asia Forum
by Mukul G. Asher
The 2008 global crisis and its aftermath have not adversely impacted Singapore’s medium term growth performance. After only 1.4 per cent growth in 2008, and negative 2.0 per cent growth in 2009, the economy rebounded strongly in 2010, with the most recent projected growth rate of 14.8 per cent. The cyclical upturn in the global demand has been a major factor in the strong rebound in 2010 with goods producing sectors, including electronics manufacturing, being the largest contributor.
The services sector was aided by the commencement of casinos during 2010. This is reflected in the projected S$300 million in collections from levy on Singapore residents who visit casinos. The projections are that Singapore’s gambling market could exceed that of Las Vegas by end 2011.
2010 growth was primarily external demand driven, with Singapore’s non-oil exports increasing by 24 per cent in 2010. Singapore’s strong fiscal position did however also permit strong fiscal stimulus measures in recent years. Planned infrastructure spending, including S$60 billion over the next decade in expanding transportation network, suggests that this fiscal stimulus was used to strengthen Singapore’s position as a global city. In 2010, the CPI inflation was 2.8 per cent, while tight labour markets were reflected in the low unemployment rate of 2 per cent.
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