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- GDP (PPP):
- $314.9 billion
- 4.9% growth
- 5.7% 5-year compound annual growth
- $59,711 per capita
- Inflation (CPI):
- FDI Inflow:
Singapore’s economic freedom score is 88, making its economy the 2nd freest in the 2013 Index. Its score is 0.5 point higher than last year, with an advancement in financial freedom outweighing small deteriorations in five other economic freedoms. Singapore is ranked 2nd out of 41 countries in the Asia–Pacific region.
Prudent macroeconomic policy within a stable political and legal environment has been the key to Singapore’s continuing success in maintaining one of the world’s highest levels of economic freedom. Well-secured property rights promote entrepreneurship and productivity growth. A strong tradition of minimum tolerance for corruption is institutionalized in an efficient judicial framework, strongly sustaining the rule of law.
Singapore’s openness to global trade and investment has facilitated the emergence of a more competitive financial sector and continues to provide real stimulus and ensure economic dynamism. Competitive tax rates and a transparent regulatory environment encourage vibrant commercial activity, and the private sector is a continuing source of economic resilience and competitiveness. However, state ownership and involvement in key sectors remain substantial. A government statutory entity, the Central Provident Fund, administers public housing, health care, and various other programs, and public debt is equal to a year’s production for the entire economy.
Singapore is a nominally democratic state that has been ruled by the People’s Action Party (PAP) since independence in 1965. The PAP won the May 2010 elections with the lowest percentage of the popular vote in its history. Six opposition members also won seats. Certain civil liberties, such as freedom of assembly and freedom of speech, remain restricted, but the PAP has embraced economic liberalization and international trade. Singapore is one of the world’s most prosperous nations. Its economy is dominated by services, but the country is also a major manufacturer of electronics and chemicals.
Contracts are secure, there is no expropriation, and the commercial court functions efficiently. Singapore has one of Asia’s strongest intellectual property rights regimes, although enforcement could be improved. The government enforces strong anti-corruption measures, and acts of bribery, whether committed inside Singapore’s territory or overseas, are prosecuted by the government.
The top income tax rate is 20 percent, and the top corporate tax rate is 17 percent. Other taxes include a value-added tax (VAT) and a property tax. The overall tax burden equals about 14.1 percent of total domestic income. Government spending is equivalent to 17 percent of GDP. Structural budget surpluses have sustained high debt levels near 100 percent of GDP. The state remains heavily involved in the economy through government-linked companies.
The overall regulatory environment remains one of the world’s most transparent and efficient. With no minimum capital required, launching a business takes only three days. There is no statutory minimum wage, but wage adjustments are guided by the National Wage Council. Inflation is under control despite the challenging external environment. The state influences prices through state-linked enterprises and can impose controls as it deems necessary.
The trade regime is very open and competitive, and no tariffs are imposed on imports. Foreign and domestic businesses are treated equally under the law, but foreign investment in some service industries remains limited. As a leading global financial hub, the efficient financial sector is highly competitive. The government has been opening the domestic market to foreign banks. Over 100 of 120 commercial banks are now foreign.