Introduction

Singapore is an economically well-developed country; it enjoys a remarkably open

and corruption free environment, stable price and a GDP per capita that is higher
than most developed countries.
Singapore depends heavily on exports, particularly in technology and biomedical,
and services provide the main source of revenue for its economy.
Singapore has attracted major investments in pharmaceuticals and medical
technology production and will continue to establish itself as Southeast Asias
financial and high tech hub.
A Production Output Performance Analysis, Labour Market Analysis and Price Level
Analysis will be provided from the viewpoint of Singapores economy to assess the
performance trends over the past 10 years and what measures Singapore
government has taken to achieve such performance.
Production Output Performance Analysis

The graph above shows Singapore GPD at constant prices

The graph above shows Singapore GDP annual growth rate

The graph above shows Singapore GDP per capita based on PPP

Singapore has strong economic growth since 2004 after adapting to several shocks
which include the global economic slowdown in 2001, the outbreak of SARS and the
Iraq war in 2003, which affect tourism badly
Singapore has a GDP growth of average 8.6% from 2004-2007. The economy
contracted 0.6% in 2009 due to financial crisis, but rebounded 15.2% in 2010 on the
strength of renewed exports, before slowing to 6.0% in 2011, 2.5% in 2013 and 3.8%
in 2013, largely due to low demand for exports during the second European
recession.
Governments measures to achieve the economic performance
Monetary policy in Singapore centred on the exchange rate of Singapore dollars, this
reflects the fact that in Singapore small and open economy, the exchange rate is the
more effective tool in maintaining price stability
Fiscal policy can decrease unemployment by helping to increase aggregate demand
and rate of the economic growth. The government will need to pursue expansionary
fiscal policy; this involves cutting taxes and increasing government spending. Lower
taxes leads to increase in disposable income, therefore helps to increase
consumption and leads to higher aggregate demand, hence there will be a strong
economic growth

Labour Market Analysis

Singapore has one of the lowest unemployment rates in the world, most of the labour
force is well educated and highly skilled.
During the period 2004-2007, unemployment rate in Singapore fall from 3.4% in
2004 to 3.1% in 2005 and 2.7% in 2006, reflecting government efforts to enhance
labour market flexibility aided by job redesign and retraining. Unemployment rate
further fell to 2.1% in 2007, reflecting strong job creation, notably in the services and
construction sectors.
In 2008-2009 financial crisis, Singapore entered the recession in second quarter of
2008 which cause unemployment rate to rose to 3.3%. However, Singapore
managed to rebound strongly in 2010 from the financial crisis, then unemployment
rate fall from 3.0 in 2009 to 2.2% in 2010.
Since the financial crisis in 2008-2009, unemployment rate of Singapore has been
improving gradually from 2.2% in 2010 to 1.9% in 2013
Types of Unemployment Singapore face & Governments measures to achieve full
employment
Singapore face frictional unemployment when Singaporeans changes job and new
graduates from university who just entered the labour market need time to find a
suitable job at proper wage rate, many will be unemployed for the period while
involved in a job search. Singapore government organise job matching to provide
Singaporeans with more information on job availability to match workers on suitable
jobs at the earliest time possible.
Also structural unemployment due to structural changes within the economy and
workers in Singapore might not have the appropriate skills and expertise to move
into different industry, hence there is a mismatch of skills due to change of structure
in the economy. Singapore government provides skills training programmes to
upgrade workers and employability institute to make sure workers constantly have
the skills for knowledge based on economy.

Price Level Analysis

Singapore has a low inflation rate from 2004-2007, the inflation rate falls from 1.7%
in 2004 to 0.5% in 2005. However the inflation rate rose to 1% in 2006 and 2.1% in
2007 due to increase in oil, food and other commodity prices, GST also contributed
to the rise of inflation rate, these factors has caused the inflation rate to rise further to
6.6% in 2008.
Inflation rate fall to 0.6% in 2009, then rises up to 2.8% in 2010 and 5.2% in 2011
due to the same issue happened in 2005-2008. Inflation rate again starts to drop to
4.6% in 2012 and 2.4% in 2013.
Causes of Inflation in Singapore and Governments measures to achieve stable price

Singapore faces imported inflation. As Singapore is a small and open economy with
limited natural resources, and has to depend heavily on imports from other countries
for both consumption goods and factors inputs. In fact, Singapores exports are
made from imported inputs. The Monetary Authority of Singapore has allowed the
Singapore dollar to appreciate so as to help mitigate higher prices of imports such as
food and oil.
Imported inflation might lead to cost push inflation. Cost push inflation happens when
aggregate supply rises due to the economy wide production costs rises. As labour
cost is the largest component of total costs in Singapore, a sudden rise in wages can
lead to significant cost push inflation. To manage tight labour market, Singapore
government works with unions and companies to raise productivity. This can be
achieved through improving production processes of companies, and also
encourage workers to upgrade their skills. With enhanced productivity, firms can pay
their workers higher salaries and cope with higher business costs.

Conclusion
Even though Singapore is the second smallest country in Asia, it has one of the most
developed economies in the world. The biggest factor that makes Singapore so
successful is its government business friendly systems, one of the systems in
Singapores tax policies, Singapore has effective tax policies that allow companies to
maximise their profits and attract more investors.
The other system is the education system in Singapore. Singapore is consistently
upgrading its education and training systems to ensure that Singaporeans are
equipped with the appropriate skills and expertise to compete in the rapid changing
global economy.
Singapore business friendly systems and its heavy emphasis in education have
contributed to its growth as a leader in global competitiveness.