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Explore Singapore's latest macroeconomic trends and forecasts to inform business strategy and pinpoint opportunities and risks

Singapore: Macroeconomic Country Outlook

GlobalData forecasts Singapore’s real GDP to grow by 5.1% in 2022
Singapore ranked third out of 152 nations in the GlobalData Country Risk Index (GCRI) Q2 2022
According to GlobalData, the industrial production index of the country contracted by an average annual rate of 9% during January 2022 to May 2022

As a major financial hub in the Asian region, the country has experienced robust economic growth over the years. According to the IMF, Singapore recorded an average current account surplus of $60.2 billion during 2017–21. The current account surplus remains substantial and persistent, averaging 16.4% of GDP during 2017–21, because of a very high savings rate relative to its investment rate, according to the IMF. The government net lending, as percentage of GDP, is expected to grow at an annual average rate of 2% during 2022-24. According to GlobalData, the total trade balance stood at around $62.5 billion in 2021, compared to $38.0 billion in 2020. According to Department of Statistics, the net international investment of the country increased to S$1.38 trillion ($1.03 trillion) in 2021 from S$1,030 billion ($$773 billion) in 2016.

Key findings

Singapore stance on Russia-Ukraine crisis: According to the Ministry of Foreign Affairs Singapore, following Russia's invasion of Ukraine in February 2022, Singapore has imposed unilateral sanctions on Russia, condemning the action as an unprovoked military invasion of a sovereign state. The Singaporean government imposed financial sanctions against specific Russian banks, organisations, and activities as retaliation for Russia's invasion of Ukraine. Providers of digital payment token services are forbidden from enabling transactions that could help the financial control measures and impose export restrictions on goods that could be used as weapons in Ukraine to attack or oppress the Ukrainian people.
Real GDP growth to slow down in 2022: The government has been able to control the spread of COVID-19 since June 2020, leading to a better fiscal position than many other countries. An effective vaccination program and prudent government spending led to a quick rebound in economic activity. The Singapore economy grew by 7.6% in 2021. In Q1 2022, GDP rose above its pre-pandemic level, propelled by strong domestic demand and a rebound in tourism from the second half of 2021. GlobalData forecasts the real GDP to grow by 3.6% in 2022. Singapore’s direct impact of Russia and Ukraine war are limited, but activities are likely to be hit by increasing commodity prices.
Singapore was ranked second out of 190 countries in the World Bank’s doing business ranking: According to the World Bank, Ease of Doing Business Report (2020), Singapore was ranked second out of 190 countries with a score of 86.2 out of 100 in terms of ease of doing business. In order to start a business in Singapore, it takes two procedures and 1.5 days as compared to the East Asia & Pacific average of 6.5 procedures and 25.6 days. In 2020, the city was ranked first in enforcing contracts and third in protecting minority investors out of 190 countries.
Singapore ratifies the RCEP deal: Singapore ratified the Regional Comprehensive Economic Partnership (RCEP) deal in April 2021, thereby becoming the first country to do so in a multi-nation trade pact that brings together the other ten ASEAN countries, along with Australia, New Zealand, China and South Korea. This will enhance trade relations between Singapore and other nations and spur economic integration in the coming years. Many firms and businesses will benefit from tariff elimination of about 92% on average. Moreover, Singapore firms will benefit with new export orders due to multi-lateral trade agreement. In addition, implementation of streamlined rules of origin will allow for greater flexibility to tap on preferential market access benefits. RCEP is effective from January 1, 2022.
CyberCall 2022: On August 31, 2022, the Cyber Security Agency of Singapore (CSA), together with partners, National University of Singapore (NUS) Enterprise and TNB Ventures, launched the Cybersecurity Industry Call for Innovation 2022 (CyberCall 2022). In order to participate in CyberCall to develop innovative solutions to address specific cybersecurity challenges, cybersecurity companies are invited. The areas in which challenges needs to be addressed include the following: artificial intelligence (AI) for cybersecurity, cloud security, operational technology (OT) / internet of things (IoT) security, privacy-enhancing technologies.
Waste management and recycling: According to the National Environment Agency, the amount of solid waste disposed of in Singapore has increased by roughly seven times, from 1,260 tonnes per day in 1970 to a peak of 8,741 tonnes per day in 2021, as a result of the country's expanding population and thriving economy. The only landfill in Singapore at the moment is Semakau Landfill, first opened on April 1, 1999. It is anticipated that the 350-hectare facility will satisfy the nation's solid waste disposal requirements through 2035 and beyond. In 2021, the landfill averaged receiving 2,098 tonnes per day of non-incinerable garbage and ash from incineration. In 2021, about 6.94 million tonnes of solid waste were generated, of which 3.83 million tonnes were recycled, according to the National Environment Agency.

Key fundamentals

Sectoral outlook

Electronics industry slowing down: Manufacturing is a key engine of Singapore’s economy, in which electronics occupies a major position. Singapore has been a leader in the modern technology industry. Electronic parts manufactured in the city are used in production all over the world. Exports of semiconductors are a major source of export earnings for the city. According to the Enterprise Singapore, in August 2022, the total amount of exports increased, although shipments of electronics decreased for the first time in over two years. Electronics exports dropped 4.5% on an annual basis, marking the first drop since November 2020, as opposed to a 10.3% increase in July 2022. Reduction in shipments of integrated circuits, disc media goods, and PC component components was the main factor in the downturn. Higher price of raw materials and lower demand from other major economies will continue to bother the growth prospects of the industry.
Tourism industry to witness growth in 2022 due to easing of restrictions by the government: Following the city's reopening of borders under the Vaccinated Travel Framework established on 1 April 2022, the Singapore Tourism Board (STB) on July 14, 2022, revealed its forecast for international visitor arrivals (IVA). With global travel picking up pace, Singapore anticipates 4–6 million tourists by the year 2022. When compared to the same period in 2021, Singapore's first half of 2022 saw 1.5 million visitor arrivals, an increase of almost 12 times (119,000). Even though Singapore’s international visitor arrivals (IVA) and tourism receipts (TR) figures are still much below those from before pandemic, STB continues to believe that tourism flow will gradually return to levels seen before COVID. Singapore has been refreshing its existing tourism infrastructure and attractions such as The Museum of Ice Cream.
Singapore e-commerce market to surpass $10 billion mark in 2025: Singapore continues to evolve as a major e-commerce market and is expected to grow at a compound annual growth rate of 16.2% from S$7.8bn ($5.9 billion) in 2021 to S$14.2bn ($10.7 billion) in 2025 supported by rising consumer spending, government support and growing preference for online shopping. Singapore has been taking various initiatives to drive e-commerce adoption among small businesses by offering benefits in the form of subsidies. As a part of its ‘E-Commerce Booster Package’, the government offered subsidies to retailers for opting online channels and selling products online via participating e-commerce platforms such as Lazada, Shopee and Zalora. Eligible retailers were offered up to 80%, capped at S$8,000 [$6,052.89], of setup and selling costs in subsidies. The growth in online shopping will also benefit electronic payments growth in the country.

GlobalData Country Risk Index (GCRI) – Q2 2022

Singapore ranked third out of 152 nations in the GCRI Q2 2022. The country’s score is in the very low risk nations band. The country’s risk score is lower than other peer nations such as Thailand, Hong Kong and Indonesia. Singapore’s overall risk score (19.1) is lower than the Asia-Pacific and World averages. The country’s stable macroeconomic environment places it above other peer nations. Singapore’s overall score has decreased from 19.6 in Q1 2021 to 19.1 in the Q2 2022 GCRI update.

GCRI Methodology

GlobalData’s unique Country Risk Model determines the existing and future level of country risk by assessing various qualitative and quantitative factors. The index is designed to help firms formulate their global business strategies based on historical developments in an economy.

The Country Risk Index incorporates the latest available macroeconomics, political, social, technological, environmental, and legal data from a range of recognized national and international statistical sources and incorporates proprietary data from GlobalData. Asia Pacific nations in this publication include China, Singapore, Thailand, Indonesia, Hong Kong, India, Indonesia, Australia, Vietnam, the Philippines, and New Zealand.

About the report

GlobalData Macroeconomic Outlook report is designed to provide detailed macro-economic analysis which will help clients in their business planning, investment and strategic decisions, and analysis. It also provides a quick view of the current situation and the risk score of the country in comparison to region and world based on the proprietary risk framework. The report also highlights key strengths, weaknesses, opportunities, and threats in each of the pillars of PESTLE, economic growth prospects, and key events which can impact the country’s future outlook.

More details: Macroeconomic Outlook Report: Singapore

Explore Singapore's latest macroeconomic trends and forecasts to inform business strategy and pinpoint opportunities and risks Explore Singapore's latest macroeconomic trends and forecasts to inform business strategy and pinpoint opportunities and risks Visit Report Store