Finally, we have reached the last installment of the myth-busting series. (For the previous post, please click here.)
For today's myth, we will be addressing a concern that some local and foreign investors worry about. But hopefully after using facts and data, you'll be able to get a clearer picture of the Singapore economy.
Have you heard friends or maybe your neighbor telling you this, "Eh...Singapore economy is slow lah! Not good!"
Today we shall look at the myth of "Singapore's slowing economy".
Is this really the case? Lets examine the data,
You can see that over the past 10 years, Singapore's GDP per Capita has grown extensively. And here's a quick video of our progress for 2017.
In 2017, the economy expanded by 3.6%, an improvment from the 2.4% growth in 2016. Nominal GDP increased to $447.3 billion in 2017, as compared to $427.9 billion in 2016.
"In 1965, Singapore’s nominal GDP per capita was around US$500. We were at the same level as Mexico and South Africa.
In 1990, GDP per capita had risen to about US$13,000, surpassing South Korea, Israel, and Portugal.
In 2015, GDP per capita was about US$56,000. We had caught up with Germany and the United States.
By 2040, when our GDP per capita had reached US$96,000, we were already among the top-ranked countries in the world and our benchmark became cities. We were among the top 25 cities then.
Today, in 2065, GDP per capita is US$120,000, fifth highest among cities in the world." - Ravi Menon, Managing Director, Monetary Authority of Singapore (MAS)
How are we able to achieve such numbers? It's because we have a proactive government. One of the main economic strategies enacted by the Singapore government, is a shift to productivity-driven growth.
Financial incentives were given to firms to undertake capital deepening and adopt technology solutions to raise productivity. Eg. PIC Scheme, Wage Credit Scheme...etc
Programmes were put in place to help Singaporeans develop and master skills in new growth clusters. Eg. SkillsFuture
Push towards a Digital Economy
And how much returns is the Singapore Government expecting from all of this in the near future?
A study done by Unloc king the Economic Impact of Digital Transformation in Asia-Pacific, surveyed over 1,500 business leaders in mid- and large-sized organisations from 15 countries and territories in the Asia-Pacific, of whom 100 respondents were from Singapore.
The respondents identified 5 ways in which local firms have benefited from digital transformation initiatives:
1) higher profit margins
2) greater productivity
3) increased revenue from new product offerings
4) improved customer advocacy
5) cost reduction.
All of which will potentially "add an estimated US$10 billion to Singapore's gross domestic product (GDP) and increase GDP growth at an annual rate of 0.6 per cent by 2021."
Internationally, Singapore is well-regarded as a safe haven for investments and business. An article from Telegraph.co.uk, stated that,
"Singapore is, in most respects, a textbook example of an open, small- state, free-market economy. Low taxes, rule of law, respect for intellectual property rights, intolerance of corruption and a policy mindset to facilitate business and finance, rather than hinder them – all these things have been key to Singapore's success, attracting unparalleled levels of inward investment and encouraging the development of some truly world-class industries."
Globally Singapore has a strong foothold in Foreign Direct Investments (FDI) inflows which tracks the amount of investments from foreign businesses and entities in Singapore.
Why is this so? Because of various factors:
1. Loads of financial back up for the Foreign Investors: One of the most important factors which influence the foreign investment in any country and so in Singapore is the financial support that it can provide to its investors. The ability to finance the investments of the investors attracts more investors.
2. Tax benefits: Singapore has double tax treaties which Singapore has entered with more than 70 other countries across the globe. Which basically means tax savings for these countries.
3. Free Trading Environment: The most important factor influencing the business and trade in Singapore is its free entry-exit option. Singapore is well-known for being an open-market.
4. Currency and Financial Stability: Singapore is one of the most financially stable markets in the whole world which gives investors assurance of their money.
5. Incentives: To attract FDI, Singapore provides loads of incentives for investing in specific sectors like the financial sector, health sector, tourism, digital and telecommunication sector.
Singapore's economy has increased steadily since independence and even surpasses that of the UK now. Many people know Singapore as a stable and effective country, with a strong economy and world-class education system.
Are you still unsure of the prospects of Singapore's future? If foreigners are rushing into Singapore to do business and purchase properties, why are you still waiting?
Do you want to lose the opportunity today to grow your wealth and assets?
Every housing decision needs to be carefully catered to each individual's needs and situations. If you are still lost or unsure, please contact us today for a free discussion. We have helped many clients to create a clear strategy plan and make the informed decision for their loved ones.
Many Thanks Teoduoproperty
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