Report No. 948-SI

SingaporeUpdating Economic MemorandumApril 15, 1976East Asia and Pacific Department

FOR OFFICIAL USE ONLY

Document of the World Bank

This document has a restricted distribution and may be used by recipientsonly in the performance of their official duties, Its contents may nototherwise be disclosed without World Bank authorization.

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CURRENCY EQUIVALENTS

Current Unit = Singapore Dollar

5$ 1.00 = US$0.40US$1.00 S$2.49S$ 1 million = US$401,606

r~~~~~

FOR OMCIAL USE ONLY

This report was prepared by Mr. Norman Hicks

who visited Singapore July 14-18, 1975.

This document has a restricted distribution and may be used by recipients only in the performanceof their official duties. Its contents may not otherwise be disclosed without World Bank authorization.

TABLE OF CONTENTS

Page

Map

A. Basic Data 1

B. Introduction 1

C. Recent Economic Developments 1

D. Population and Employment h

E. Fiscal and Monetary Policy 6

F. Balance of Payments 7

G. Outlook 8

Statistical Appendix

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SINGAPORE

UPDATING ECONOMIC MEMORANDUM

A. Basic Data (1974):

Population (millions) 2.22GNP (billions US$) $ 5.05GNP per capita (Bank Atlas, 1973, US$) $1,828Area (sq. km) 588Population/Sq. km 3,777Exchange Rate (S$IUS$) 2.437

B. Introduction

1. During the past decade Singapore has quickly moved from an entre-pot trading center to one of Asia's major industrial and financial centers.Between 1966 and 1973 Singapore achieved a remarkable growth rate of be-tween 11 percent and 14 percent every year, with an average of 13 percentfor the whole period. At the same time, the rate of inflation averagedonly 2.6 percent (1966-1972). The economy has been characterized by a highdegree of reliance on foreign investment and foreign trade. Export volumegrew at a rate of about 12 percent per annum during this period, and 23percent per annum if the entrepot sector is excluded. With Malaysia andIndonesia processing an increasing proportion of their own export commodi-ties, entrepot exports now account for less than 49 percent of Singapore'stotal exports, compared to over 96 percent in 1960. The high degree of"topenness"' of the Singapore economy is evidenced by the fact that totalexports (including entrepot exports) exceeded GDP by 7 percent in 1974. Withsuch an open economy, Singapore has been severely affected by the recentworld events of a major recession plus rapid inflation.

C. Recent Economic Developments

2. In 1973, the domestic inflation rate was 12.6 percent, rising to15.4 percent in 1974. In the latter year, GDP grew by 6.3 percent, or onlyabout half the average rate between 1968 and 1973. Likewise, the annualindex of industrial production, which had grown at a rate of 17 percent perannum since 1966, in 1974 grew by only 4.2 percent. However, by the endof the year, the level of industrial production had fallen below that of theprevious year. The rate of price increase (as measured by the quarterly Con-sumer Price Index) had by that time also slowed down appreciably.

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Table 1: KEY INDICATORS

GDP at 1968 GDP Deflator Index of IndustrialMarket Prices (1968 = 100) Production (1970=100)

S$ Growth Growth Growthmillion Rate (%) Index Rate (%) Index Rate (%)

1970 5,579 13.7 104.0 1.7 100.0 17.1

1971 6,277 12.5 108.7 4.5 119.0 19.0

1972 7,120 13.4 114.6 3.4 141.3 18.7

1973 7,941 11.5 129.0 12.6 165.0 76.8

1974 8,445 6.3 148.9 15.4 171.9 4.2

Source: Department of Statistics.

3. During the first half of 1975, these tendencies continued. ByJuly 1975, the Consumer Price Index had declined 1.5 percent compared to theJanuary level. Industrial production (seasonally adjusted) dropped further,to a level more than 10 percent below the peak reached in mid-1974.

4. The fluctuations in industrial productionl are closely linkedto those in exports, Between 1972 and 1973, the volume index of exportsgrew by 22 percent, but growth slowed dowmn to 10 percent in 1974 and, ona quarterly basis, was probably negative at the end of that year. In thefirst quarter of 1975, export volume has shown a 21 percent decline overthe first quarter of 1974. This includes an 18 percent decline in theexports of electrical and electronic goods and a 25 percent decline inpetroleum exports.

5. It is widely believed in Singapore that economic fluctuationsin the OECD countries are transmitted to Singapore with a lag of aboutthree to six months. 1/ Attempts to use econometric analysis to uncoverthe time lag structure have been undertaken but have yielded ambiguous re-sults. There are indications, however, that current OECD production maybe more important than lagged production. This can, be seen in Table 2below, which indicates that the recent sharp downturn in Singapore's pro-duction is roughly correlated with the downturn in the OECD. This is alsoborne out by the sharp increase in industrial production in the third quarterof 1975 which increased by over 3 percent over that of the same period in1974 and 15 percent over that of the previous quarter. If this growth is

1/ This belief may be partly connected with the fact that seasonalfluctuations in Singapore's production follow those in the OECD witha lag of about half a year.

consolidated, it is likely that average industrial production in 1975 maybe only marginally lower than that in 1974.

Table 2: INDICES OF INDUSTRIAL PRODUCTION1970 = 100.0

Sinap ore OECD

Index Percent Change Index Percent Change

1973:1 161.8 5.3 116 2.71973:2 164.0 1.4 118 1.71973:3 164.9 .5 119 .81973:4 169.1 2.5 121 1.71974:1 172.0 1.7 120 -.81974:2 174.0 1.2 120 01974:3 175.0 .6 119 -.81974:4 166.7 -4.9 115 -3.41975:1 158.6 -1.8 108 -6.11975:2 156.0 -1.6 107 - .9l9 75: 3P 179.4 15.0 108 .9

6. When discussing industrial production in Singapore, it is wellto remember that a few industries account for the large bulk of total valueadded. Based on 1974 value added, the leading sectors are: petroleum re-fining (24 percent), electronics and electrical machinery (14 percent) andtransport equipment - largely shipbuilding - (14 percent). These threealone account for over half of the manufacturing value added. The recentdecline in the industrial production index hides some diverse movementsin the major sectors. Between the first quarters of 1974 and 1975, petro-leum refining and electronics both declined by about 25 percent, due largelyto slackening foreign demand. Shipbuilding, on the other hand, showed anincrease of 43 percent, as there was a large increase in demand for off-shore drilling rigs.

7. Investment in industry reacted rather promptly to the changesin output growth. In 1974, 150 new firms employing 9,030 persons wereregistered, compared to 190 firms employing 11,140 persons in 1973. For-eign investment has always been particularly important and a major sourceof output growth in the past. During 1974, new commitments totalingS$678 million were made by foreign firms in manufacturing, almost equalin nominal terms to the amount committed in 1973 (see Table 3) but signifi-cantly lower in real terms. Partly in response to new policies (see para-graph 12 below) the trend in recent years has been for a movement towardsless labor-intensive activities such as petrochemicals and metal products.Over half of the new commitments in 1974 were in petrochemicals, and theprospects for 1975/76 call for even further expansion. Of particular noteis an anticipated S$2 billion investment by the Sumitomo Group in a petro-chemical complex to be located on an island offshore of Singapore. Itappears that total foreign investment in the first half of 1975, however,was running considerably below the 1974 rate.

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8. In summary, recent economic developments in Singapore have beenunfavorable, due to the international recession. The downturn started ap-proximately in the middle of 1974, and continued until at least the middleof 1975. Exports, industrial production and investments were all affectedsubstantially. In the second half of the year substantial recovery is likelyin exports and production. It is possible that ia 1975, for the first timein many years, there will be little or no growth in real GNP on a year toyear basis.

D. Population and Employment

9. Coincident with thie great upsurge in Singapore's economy overthe decade 1965-1974, annual population growth has dropped substantially,from 2.5 percent in the mid-sixties to 1.7 percernt in the early seventiesand an estimated 1.4 percent in 1974. The Government's eventual targetis zero population growth and, in order to achieve this, it has instituteda relatively stringent policy package. This includes inter alia no incometax relief for the fourth child born on or after August 1973 and no paidmaternity leave (for civil servants) for the third child. There is almostno immigration-generated population growth. Labor migration into Singapore(mostly from Malaysia) is controlled. The vast majority of migrants aregiven temporary work permits which are renewed only if economic conditionswarrant it, These workers gravitate to low skill jobs - the construction,and manufacturing industries have absorbed the bulk of them in the past - asthe higher skill jobs are dominated by Singaporeans.

10. During the period of strong economic growth, employment grew atan average rate of 5.5 percent per annum, one and a half times as fast asthe growth in the population of 14 years and older. As a result, the un-employment rate fell from 8e9 to 4.0 percent, and there was a large in-crease in the labor participation rate, especially among women by 1974,32 percent of the labor force were women. Tnus, the emplovment situationimproved very significantly and, although precise data are lacking, therecan be little doubt that this contributed to an improvement in income dis-tribution which as a result is probably more equitable in Singapore thanin many neighboring countries. Looking at it from another side, however,much of Singapore's earlier open or disguised labor reserves were by 1974being used. As a result, the future growth in the labor force will be muchmore closely limited by the growth of the working age population whichfollows the rapidly falling natural growth of the population with a time lagof' 15-20 years.

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Table 4: ESTIMATES OF LABOR FORCE, 1966-1974

Year Population Labor Persons Empl. Unemployed Participation(15-64 years) Force Employed Growth as % of Rate_________ _______ (% p.a.) Labor Force

1966 1,038.5 575 524 .. 8.7 55.41968 1,109.8 626 580 5.2 7.3 56.41970 1,200.3 693 651 5.9 6.0 57.71972 1,286.9 761 725 5.5 4.7 59.21974 1,389.6 836 803 5.2 4.0 60.2

11. Given the longer term outlook, the Government's industrializationpolicy has been shifting its emphasis. In the past, Government policyaimed at reducing unemployment by attracting labor-intensive industries,which were also low skill industries for the most part. In recent yearsthe Government has become concerned with the maintenance of economic growthin circumstances of virtual full employment, which implies acceleratedgrowth in productivity. Thus, Singapore has become interested in attrac-ting more capital-intensive/skill-intensive industries which could signifi-cantly raise the average capital-labor ratio of the industrial sector. Thispolicy, which has been evolving for the past few years, has been fairlysuccessful thus far. Apart from the specific measures taken, an importantfactor has been Singapore's ability to offer the foreign investor a welleducated and disciplined labor force, capable of adapting to the higherskill requirements of more technologically sophisticated industries.Among the specific measures which the Economic Development Board (EDB) haslaunched is a new Capital Assistance Scheme designed to furnish both equityand/or loan capital to small- and medium-scale new industries in skill-intensive areas. In the same vein, the tax-exempt status permitted forpioneer industries has been extended from five to ten years. Both of thesemoves were undertaken in the belief that capital requirements and riskfactors are higher with the more skill-intensive industries having highercapital/labor and capital/output ratios. In addition, the EDB has begunto require licenses for new foreign investments in certain industries whichhave a high labor component. The two industries presently being licensedare apparel and electronics (semi-conductors). While there is no outrightprohibition on foreign investment in these areas, the merits of each caseare reviewed by the EDB. Some proposals have, in fact, been turned down.Besides attempting to shape the structure of new industries, the EDB haslaunched several schemes for manpower development, including two trainingprograms started since 1973.

12. During the present recession, the earlier pattern of rapid laborabsorption has, however, been reversed. Due to declining industrial out-put, about 17,000 workers were estimated to have been laid off in 1974, butabout 80 percent of these were women who were secondary wage earners and

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probably dropped out of the labor force temporarily. 1/ The remainderappear to have been successfully absorbed by other sectors. The relativelysmall employment effect of the recession appears to be at least partially dueto the fact that a large part of the industrial cutback was in the verycapital-intensive petroleum refining industry, while the more labor-inten-sive shipbuilding sector was expanding. The refinery sector, which accountsfor 24 percent of manufacturing value added, employs only 1.5 percent ofthe manufacturing labor force. During 1975 the open unemployment rate, con-ventionally measured, has increased, but probably by no more than 0.5 per-centage points.

13. Preliminary statistics from the National Statistical Commissionindicate that wages through September 1974 were increasing at an annualrate of about 22 percent. The labor market appears to be very stable,with few interruptions in production due to strikes or other forms oflabor unrest. Wage increases tend to follow the recommendations of theNational Wages Council, which called for an increase of 6 percent with off-setting of annual increments, for the period July 1975 - June 1976.

E. Fiscal and Monetary Policy

14. The budget for FY75 (April 1975 - March 1976) is intended to becounter-recessionary in allocating increased funds for development and otherpurposes. Recurrent expenditures are budgeted at S$2,146 million, an increaseof 18 percent over the provision for FY74. Development expenditures areprogrammed to increase by 40 percent to S$2,188 million. Due to the reces-sion, public revenues are expected to show only moderate growth. Thus, asubstantial deficit is foreseen. This is in marked contrast to the actualsurpluses realized during the last year (S$128 million) 2/ and the past sevenyears which have averaged S$113 million. In the past, the Government hasfrequently projected deficits but wound up the year in surplus. This year,given the recession, the outcome will probably be different, however, and theGovernment sector may act as a significant stimulus, even if it does notsucceed in increasing development expenditures as fast as has been planned.

15. With the price level stabilizing during 1975, the MonetaryAuthority of Singapore (MAS) has begun moving toward a position of monetaryease in order to stimulate the economy. In July 1975, it announced acombined plan which increased bank reserves by S$83 million by lowering re-serve requirements. In addition, actions were taken to lower the primerate and the rediscount rate, and to increase the interest subsidy forexport financing. The MAS has also moved during the past year to removesome Government controls from the financial market and place the determina-tion of interest rates on a competitive basis. Banks are now free to set

1/ Total workers laid off represent 7 percent of manufacturing employmentor 2 percent of total employment.

2/ Equivalent to about 1 percent of GDP.

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their own lending and deposit rates. Formerly a cartel of banks set therates in cooperation with the MAS. A market has been established for NCDs(Negotiable Certificates of Deposit) and the rate determined by supply anddemand factors in that market aids in the determination of commercial bankrates. Some prime rates, in fact, are tied directly to the NCD rate.

16. In general, Singapore continues to move toward its goal of becom-ing the "Zurich of the East". Central to this theme is the growth of theAsian dollar market, which has expanded from US$400 million in 1970 to overUS$10 billion by the end of 1974 (about 10 percent of the Euro-dollar market).There appears to be some slowdown in the rate of growth in 1975, as the resultof economic conditions and the larger absolute size of the market.

F. Balance of Payments

17. The balance of payments continues to be strong despite worldeconomic conditions. In 1974, export earnings reached S$18.9 billion,compared to S$12.2 billion in 1973. A large part of the expansion inexports must be traced to price increases. Oil export prices alone in-creased by some 156 percent between 1973 and 1974 and accounted for nearlyone-third of the total increase in export earnings. Still, since thevolume of commodity exports expanded in the first half of 1974 before be-ginning to decline, there was about a 12 percent volume increase for 1974.Tourism and other services account for about S$4.3 billion of total exportearnings. Tourism continued to expand at about 10 percent during 1974(based on tourist visits), which is lower than the 1969-73 average growthof about 25 percent per annum. For the first four months of 1975, tourismappears to have grown at about 7 percent over the same period in 1974. Theslowdown in tourism has resulted in a somewhat depressed condition in thehotel business.

18. While import demand has slackened somewhat as a result of declin-ing exports and domestic demand, the drop has been less severe than that inexports, resulting in an increase in the trade deficit. For 1974, totalimports reached S$21.5 billion, compared to S$13.6 billion in 1973, for anincrease of 58 percent, but only 9 percent in constant prices. Betweenthe first quarters of 1974 and 1975 the volume index of imports fell 6.5percent compared to a 21 percent drop in the volume of exports. Singapore'sterms of trade index 1/ improved in 1973 and remained steady during most of1974 (see Table 5). Declining prices for manufactured goods since the lastquarter of 1974 have resulted in a deterioration, bringing the terms oftrade back to the average of 1972.

1/ Unit value of all exports divided by the unit value index of imports.

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Table 5: FOREIGN TRADE VOLUME AND PRICE INDICES1972 = 100

Year: 1973 1974 1975Quarter: 1 2 3 4 1 2 3 4 1

Exports

Volume 115 118 123 130 137 140 134 126 108Unit Value 111 118 127 134 169 180 179 172 174

Imports

Volume 110 107 120 120 124 138 134 125 116Unit Value 106 112 117 127 158 170 170 168 174

Terms ofTrade 105 105 109 106 107 106 105 102 100

19. The cessation of the war in Viet-Nam appears to have had only aslight effect on Singapore's trade volumes. The major trading partnerscontinue to be Japan, Malaysia, the United States and the EEC, which togetheraccount for 57 percent of total trade. In 1974, Japan moved from fourthplace to become Singapore's leading trading partner, largely on the basisof the higher prices for petroleum products.

20. The slack in export growth has resulted in a current accountdeficit that doubled from S$1.48 billion in 1973 to S$2.73 billion in1974. Even in constant prices this represents a 34 percent increase. Thisgap has been offset by a marked increase in private capital, rising fromS$848 million in 1973 to S$1,577 million in 1974, and an increase in the so-called "balancing item" from S$1.0 billion to S$2.3 billion. The latterrepresents largely unrecorded financial flows and other errors and omissions.Part of the size of this item is a result of the practice of not recordingfinancial flows from other Commonwealth countries, such as Hong Kong andIndia. The size of the capital flows was of such a magnitude that Singaporewas able to continue its nine year unbroken record of additions to reserves.Total official reserves increased by S$0.7 billion to S$6.5 billion in totalat the end of 1974. While this amount is over ten times the size of theexternal public debt, it represents only about four months of imports, orabout six months of retained imports. 1/

G. Outlook

21. Since little formal long-term development planning has been under-taken in Singapore in recent years, there is no official target for futuregrowth. Most authorities expect that after the passing of the current

1/ Retained imports exclude imports re-exported by the entrepot sector.

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recessionary slowdown there will be a resumption of "normal" growth rates ofabout 12 percent per annum. Whether or not this is feasible is difficult tosay at this time. A long-term projection model of the economy, to be constructedjointly between the Bank and the Ministry of Finance, has only recently beeninitiated and results are not yet available.

22. It is still possible, however, to examine some possible constraintsto growth. The traditional growth constraints of savings and foreign exchangedo not appear binding in the case of Singapore. The rate of savings remainshigh, and has risen during the period of rapid growth. Gross national sav-ings comprise 24 percent of GNP in 1974 but finance only about half of totalinvestment, the balance coming from foreign capital flows. A decline inthese flows could seriously curtail investment, but appears unlikely pro-vided the Government continues its policies of providing a cordial atmos-phere for foreign investors, with a minimum of Government controls and aminimum of labor unrest.

23. The growth of the labor force will probably start to come downfrom its recent rate of over 5 percent per annum and may over the next15-20 years fall to the present population growth rate of 1.4 percent perannum. If productivity growth remains at its recent rate of 6 percentper annum, total GDP could gradually be constrained to something like an8 percent growth rate. For the more immediate future, the 10-12 percentwhich Government officials are expecting does not, however, appear to beout of reach. Moreover, in the longer run, considerable room appears toexist for accelerated growth in labor productivity. In this area Singaporeis behind countries such as Hong Kong and Korea, where productivity has grownby more than 10 percent in some years. Rapid growth in labor productivitymay be stimulated not only by the Government's policies (para 11 above)but also by the economy nearing full employment leading to the eliminationof marginal jobs.

24. The most serious constraint to Singapore's growth may be futureOECD growth rates and the demand for Singapore's exports. The rapid growthof the past occurred during a period of fast and sustained growth in OECDcountries. It is possible that Singapore's export demand at least partlyrepresented a spillover of excess demand from the OECD countries, particu-larly Japan and the United States. At the same time, the present foreigntrade regime of floating rates may have corrected earlier distortions inwhich Singapore benefited from comparatively lower production costs thanJapan or the U.S., and may dampen the demand for Singapore's exports aswell as the flow of private foreign investment. How much this might affectthe overall growth rate, however, is impossible to tell at this time.

25. In conclusion, the continuation of growth in Singapore after thepresent recession appears likely. Changes in the international environmentand/or a gradual decline in the growth of the labor force may, however,result in a lower growth rate than in the past.

STATISTICAL APPENDIX

1. POPULATIONTable

1.1 Population Statistics, 1964-1974

2. NATIONAL ACCOUNTS

2.1 Gross National Product, Saving and Investment (at current market prices)2.2 Gross Domestic Product by Industry (at current market prices)2.3 Gross Domestic Product by Industry (at constant 1968 market prices)

2.4 Expenditure on Gross Domestic Product (at current market prices)2.5 Expenditure on Gross Domestic Product (at 1965 market prices)

3. BALANCE OF PAYMENTS

3.1 Estimates of Balance of Payments3.2 Volume and Unit Value Indices by Commodity Groups, Imports and Exports

h. PUBLIC FINANCE

4.1 Economic Classification of Government Revenue4.2 Functional Classification of Government Current Expenditure

5. MONETARY STATISTICS

5.1 Money Supply and Quasi Money (end of period)5.2 Official Foreign Reserves (end of period)

6. PRICES

6.1 Consumer Price Index6.2 Deflators of Expenditure on Gross Domestic Product

7. INDUSTRY

7.1 Quarterly Index of Industrial Production

Table 1.1: POPULATION STATISTICS, 1964 -1974

1964 1965 1966 1967 1968 1969 1970/I 1971 1972 1973 1974

Mid-year population estimates(in thousands)

TOTAL 1,841.6 1,886.9 1,934.4 1,977.6 2,012.0 2,042.5 2,074.5 2,110.4 2,147.4 2,185.1 2,219.1

Malays 267.0 277.0 287.7 295.8 300.5 306.0 311.4 317.3 323.2 329.1 334.1

Chinese 1,405.5 1,439.5 1,473.8 1,504.4 1,531.4 1,555.0 1,579.8 1,606.6 1,634.6 1,663.4 1,689.5

Indians /2 133.0 135.1 135.8 137.5 139.2 139.7 145.2 147.5 149.6 151.7 153.5

Others 36.1 35.3 37.1 39.9 40.9 41.8 38.1 39.0 40.0 40.9 42.0

Rate of growth (per cent) 2.5 2.5 2.3 2.0 1.6 1.5 1.7 1.7 1.8 1.7 1.4

Rate of natural increase (per thousand) 25.9 24.1 22.9 20.2 18.0 16.8 17.0 16.9 17.8 16.6 14.2

Crude birth rate (per thousand) 31.6 29.5 28.3 25.6 23.5 21.8 22.1 22.3 23.1 22.1 19.5

Crude death rate (per thousand) 5.7 5.4 5.4 5.3 5.5 5.0 5.2 5.4 5.4 5.5 5.3

Rate of growth (per cent) 1964 - 1974 = 1.9

/1 Census of population, 1970.

/2 From 1970, figures include Sri Lankans (Ceylonese) who were primarily included under "Others".

Source: Department of Statistics, Singapore

Table 2.1: GROSS NATIONAL PRODUCT, SAVING AND INVESTMENT(at current market prices - S$ millions)

1968 1969 1970 19/1 1972 1973 1974

Gross National Product

Gross national product at market prices 4,402.3 5,104.6 5,861.1 6,813.3 8,080.5 9,970.9 12,302.1

Gross domestic product at factor cost 3,970.8 4,609.5 5,319.9 6,279.4 7,523.9 9,473.3 11,770.0Indirect taxes 344.2 410.4 685.0 543.9 631.9 767.3 805.0

Net factor income from abroad 87.2 84.7 56.2 -10.0 -75.3 -269.7 -272.9

Generation of Gross National Saving

Gross national saving 865.3 972.9 1,129.7 1,252.7 1,862.9 2,517.6 2,927.2Gross domestic saving 791.6 905.0 1,065.4 1,259.9 1,931.8 2.797.4 3,295.2

Gross domestic product at market prices 4,315.0 5,019.9 5,804.9 6,823.3 8,155.8 10,240.6 12,575.0

Less: Private and government consumptionexpenditure 3,628.5 3,999.6 4,612.1 5,462.6 6,163.6 7,654.5 9,159.2

Statistical discrepancy 105.1 -115.3 -127.4 -100.8 -60.4 211.3 -120.6

Net factor incpme from abroad 87.2 84.7 56.2 -10.0 -75.3 -269.7 -272.9Net transfers from abroad -13.5 -16.8 8.1 2,8 6.4 -10.1 -95.1

Finance of Gross Domestic Capital Formation

Gross domestic capital formation at

market prices 1,075.2 1,437.4 2,244.5 2,744.1 3,354.4 4,000.0 5,657.4

Gross national saving 865.3 972.9 1,129.7 1,252.7 1,862.9 2,517.6 2,917.2

Net borrowing from abroad 209.9 464.5 1,114.8 1,491.4 1,491.5 1,482.4 2,730.2

Source: Department of Statistics, Singapore

Table 2.2; GROSS DOMESTIC PRODUCT BY INDUSTRY(at current market prices - S$ millions)

Percentage Distribution /1960 1965 1970 1971 1972 1973 1974 1960 1970 1974

Gross Domestic Product 2,149.6 2,956.2 5,804.9 6,841.3 8,155.8 10,240.6 12,575.0 100.0 100.0 100.0

Agriculture 75.6 84.5 134.6 158.8 160.6 214.3 229.9 3.6 2.9 1.8Mining 6.1 9.6 19.8 24.5 28.5 28.8 33.6 0.3 0.3 0.3Construction 72.5 186.5 397.0 508.6 692.0 725.9 929.4 3.5 6.5 7.3

Manufacturing 249.6 446.6 1,186.5 1,460.6 1,853.5 2,429.0 3,004.5 11.9 15.5 23.7

Electricity, gas and water 49.8 64.4 149.1 163¢9 185.0 218.2 240.9 2.4 2.2 1.9Transport and communication 292.3 337.5 629.8 750.8 924.8 1,127.9 1,338.0 14.0 11.7 10.5Trade 719.3 814.3 1,639.2 1,850.4 2,067.2 2,771.8 3,635.5 34.4 28.4 28.6Banking, insurance and real estate 147.1 260.8 523.8 643.5 793.5 1,048.7 1,300.5 7.0 9.1 10.2Ownership of dwellings 100.0 146.8 292.0 354.9 438.8 530.1 598.6 4.8 5.1 4.7Services 321.9 444.9 573.9 653.3 711.4 821.4 1,002.4 15.4 15.5 7.9Public administration and defense 55.4 79.4 194.0 237.5 259.9 304.4 389.4 2.7 2.8 3.1Less: Imputed bank service charge 33.1 47.7 110.2 128,2 155.1 218.3 351.1Add : Import duties 93.1 128.6 175.4 162.7 195.7 238.4 223.1

/I Totals may not add up due to rounding.

Source: Department of Statistics, Singapore

Table 2.3: GROSS DOMESTIC PRODUCT BY INDUSTRY(at constant 1968 market prices -

S$ millions)

Growth Rate (average annual)1960 1965 1970 1971 1972 1973 1974 1960-70 1970-73 1973-74

(percent)

Gross Domestic Product 2,304.5 3,048.7 5,579.3 6,276.7 7,119.7 7,941.3 8,445.2 9.2 12.5 6.3

Agriculture 88.5 93.8 129.8 143.5 153.9 145.8 135.4 3.9 4.0 -7.1Mining 7.6 9.4 19.4 22.8 26.0 26.0 29.4 9.8 10.3 13.1Construction 80.1 192.9 353.6 406.6 474.0 432.9 459.4 16.0 7.0 6.1Manufacturing 294.4 456.1 1,142.8 1,356.5 1,583.9 1,841,2 1,910.6 14.5 17.2 3.8Electricity, gas and water 53.5 68.8 145.9 160.2 181.0 200.0 208.5 10,5 11.1 4.2Transportation and communication 307.1 338.7 627.9 721.2 858.8 1,041.3 1,123.8 7.4 18.4 7.9Trade 720.0 834.3 1,568.9 1,722.9 1,722.9 2,117.9 2,350.9 8.1 10.5 11.0Banking, insurance and real estate 162.6 268.8 501.6 594.5 682.2 804.4 886.7 11.9 17.0 10.2Ownership of dwellings 107.5 150.8 273.1 301.1 341.9 371.3 400.5 9.8 10.8 7.9Services 347.4 448.4 563.3 595.7 650.1 698.7 744.2 5.0 7.4 6.5Public administration and defense 61.5 79.5 193.6 222.6 239.4 261.5 292.4 12.1 10.5 11.8Less: Inmputed bank service charge 35.7 49.0 106.8 123.7 147.4 189.0 255.5 -- - _Add : Import duties 110.0 147.2 166.2 152.8 179.9 189.3 158.9

Source: Department of Statistics, Singapore

Table 2.4: EXPENDITURE ON GROSS DOMESTIC PRODUCT

(at current market prices - S$ millions)

1960 1965 1970 1971 1972 1973 1974

Private consumption expenditure 1,921.5 2,340.6 3,919.6 4,001.8 5,173.4 6,536.8 7,860.8

Government consumption expenditure 161.5 307.8 692.5 860.8 990.2 1,117.7 1,298.4

Gross domestic fixed capital formation 204.9 625.0 1,888.5 2,473.4 3,054.3 3,561.1 4,794.8

Increase in stocks 39.6 22.7 356.0 270.7 300.1 438.9 862.6

Less: Net imports of goods and services 300.9 356.3 1,179.1 1,484.2 1,422.6 1,202.6 2,362.2

Statistical discrepancy 123.0 16.4 127.4 100.8 60.4 -211.3 120.6

Total 2,149.6 2,956.2 5,804.9 6,823.3 8,155.8 10,240.6 12,575.0

Source: Department of Statistics, Singapore

Table 2.5: EXPENDITURE ON GROSS DOMESTIC PRODUCT(ac 1968 market prices - S$ millions)

1960 1965 1970 1971 1972 1973 1974

Private consumption expenditure 2,104.2 2,475.3 3,872.7 4,397.1 4,815.5 5,229.8 5,533.5Government consumption expenditure 178.5 310.7 671.8 786.3 891.2 940.1 941.1Gross domestic fixed capital formation 219.9 639.5 1,712.0 2,101.8 2,411.3 2,614.5 2,953.8Increase in stocks 18.9 25.3 335.4 235.2 191.1 181.7 465.2Less: Net imports of goods and services 276.6 324.2 1,079.8 1,343.2 1,281.6 956.7 1,278.9Statistical discrepancy 59.6 -77.9 67.2 99.5 92.2 -68.1 -169.5

Total 2,304.5 3,048.7 5,579.3 6,276.7 7,119.7 7,941.3 8,445.2

Source: Department of Statistics, Singapore

Table 3.1: ESTIMATES OF BALANCE OF PAYMENTS(S$ millions)

1965 1970 1971 1972 1973 1974

A. Goods and Services (net) -101.2 -- 1,727.2 -2,169.9 -1,497.9 -1,472.3 -2,635.1

Merchandise trade (f.o.b.)Exports 2,810.1 4,428.3 5,075.0 5,738.9 8,418.4 13,423.8Imports 3,569.9 7,047.7 8,090.5 8,838.7 11,689.7 18,964.7

Trade balance -759.8 -2,619.4 -3,015.5 -3,099.8 -3,271.3 -5,540.9Services (net) 658.6 892.2 845.6 1,601.9 1,799.0 2,905.8

Freight and insurance -206.9 -431.8 -506.0 -437.7 -532.5 -935.8Travel 53.1 248.0 298.9 347.2 485.3 633.7Investment income 52.5 114.0 161.1 -99.4 -292.7 -299.3Government, n.i.e. 525.4 404.7 358.5 170.8 195.8 198.6Other transportation and services, n.i.e. 234.5 557.3 533.1 1,621.0 1,943.1 3,308.6

B. Transfer Payments (net) -48.9 -23.6 -35.5 6.4 -10.1 -95.1

Current account balance -150.1 -1,750.8 -2,205.4 -1,491.5 -1,482.4 -2,730.2

C. Capital (net) 104.3 532.6 878.7 1,107.5 1,467.1 1,157.7

Non-monetary sector (net) 87.1 429.1 482.0 745.1 874.6 1,578.4Private 57.8 349.9 406.5 557.9 848.0 1,577.3Official 29.3 79.2 75.5 187.2 26.6 1.1

Monetary sector (net) 17.2 103.5 396.7 362.4 592.5 -420.7Commercial banks; foreign assets /1 -154.6 -13.8 -210.2 -212.7 -450.5 -385.5

foreign liabilities 171.8 117.3 606.9 575.1 1,043.0 -35.2

D. Balancing Item 31.6 1,783.0 2,301.5 1,329.0 1,020.5 2,290.9

E. Overall Balance (A+B+C+D) -14.2 564.8 974.8 945.0 1,005.2 718.4

F. Reserves (net) /1 14.2 -564.8 -974.8 -945.0 -1,005.2 -718.4

INF accounts n.a. n.a. -5.3 n.a. n.a. -946.8Monetary authorities /2 -47.3 -148.3 -770.6 -794.9 -740.5 -228.4Government 61.5 -416.5 -198.9 -150.1 -264.7

/ Increase in assets is indicated by a minus (-) sign./2 From 1971, figures include foreign assets of the Monetary Authority of Singapore.

Source: Department of Statistics, Singapore

Table 3.2: VOLUME AND UNIT VALUE INDICES BY COMMODITY GROUPS, IMPORTS AND EXPORTS(1972 = 100)

VOLUME INDEX UNIT VALUE INDEX

1973 1974 ---------- --------- 1974 ------------------- 1973 1974 ----------_-__-__-_-1974 -----_-_-_-___Commodity Section Alnual Average 1st Qtr. 2nd Qtr. 3rd Qtr. 4th Qtr. .-inual Average 1st Qtr. 2nd Qtr. 3rd Qtr. 4th Qtr.

IMPORTS

TOTAL 114 130 124 138 134 125 116 167 158 170 170 168

Food and live animals 100 97 102 104 94 89 122 154 152 156 154 154Beverages and tobacco 88 90 75 84 97 105 106 113 113 109 116 113Crude materials, inedible 122 120 141 103 115 119 148 173 200 184 167 141Mineral fuels 104 97 108 105 97 78 113 368 297 386 380 407Animal and vegetable oils and fats 107 118 135 92 109 135 116 226 147 234 247 275Chemicals 122 135 137 157 141 103 122 190 166 187 201 206Manufactured goods 114 124 115 136 124 120 116 152 144 148 157 160Machinery and transport equipment 123 170 144 175 188 172 107 124 113 126 128 127Miscellaneous manufactured articles 117 124 111 131 120 132 108 149 144 145 153 154Miscellaneous 118 152 126 168 168 144 111 121 121 118 121 125

EXPORTS

TOTAL 122 134 137 140 134 126 123 175 169 180 179 172

Food and live animals 93 96 100 93 101 91 119 151 137 156 157 154Beverages and tobacco 58 59 47 58 57 72 107 114 114 114 115 114Crude materials, inedible 120 117 134 118 112 104 162 193 233 214 179 146Mineral fuels 105 111 118 116 113 97 112 287 237 291 297 321Animal and vegetable oils and fats 102 98 94 81 81 137 111 240 176 242 275 268Chemicals 128 128 146 136 128 100 133 209 185 211 218 222Manufactured goods 124 119 120 122 122 112 125 152 153 153 161 141Machinery and transport equipment 157 204 188 224 205 200 105 118 114 119 119 119Miscellaneous manufactured articles 130 111 130 102 108 103 111 126 119 127 133 123Miscellaneous 114 150 150 163 151 134 127 178 148 190 191 182

Source: Department of Statistics, Singapore

Table 4.1: ECONOMIC CLASSIFICATION OF GOVERNMENT REVENUE

(S$ millions)

/2

1965 1969/70 1970/71 1971/72 1972/73 1973/74 1974/75(estimates)

TOTAL 507.6 1,261.2 1,266.5 1,468.5 1,749.3 2,219.2 2,323.0

Transfer receipts 382.7 890.6 888.7 996.0 1,238.7 1,568.4 1,749.1

Taxes on income 104.9 236.5 261.7 325.3 429.7 585.7 700.0

Taxes on production and

expenditure 257.8 583.8 535.7 591.2 720.9 875.4 957.7

Other transfer receipts 20.0 70.3 91.3 79.5 88.1 107.3 91.4

Disposal of goods and services 99.3 278.3 259.9 341.8 300.4 437.6 448.4

Sales of goods and services

from current operations 80.3 238.5 225.2 270.6 245.0 273.5 276.5

Reimbursements for servicesand sales of lands 19.0 39.8 34.7 71.2 55.4 164.1 171.9

Income from property andfinancial claims 25.6 92.3 117.9 130.7 210.2 213.2 125.5

Interest and dividendsreceived 14.9 84.5 110.7 123.4 187.2 150.6 120.4

Financial claims 8.3 5.8 4.7 5.3 20.7 8.5 3.1

Overpayments, refunds andothers 2.4 2.0 2.5 2.0 2.3 54.1 2.0

/1 Refers to revenue credited to consolidated fund.

/2 Refers to financial year January 1, 1969, to March 31, 1970. From 1970, figures refer to financial

year April 1 to March 31.

Source: Department of Statistics, Singapore

Table 4.2: FUNCTIONAL CLASSIFICATION OF GOVERMENT CURRENT EXPENDITURE(S$ millions)

1965 1969/70 1970/71 1971/72 1972/73 1973/74 1974/75(estimates)

/1TOTAL 391.8 1,101.5 1,206.5 1,437.7 1,579.2 2,107.4 2,299.5

General services 34.9 66.5 89.3 63.8 73.9 118.5 128.4

Defense, justice and police 19.7 305.4 333.3 424.9 437.6 524.8 637.7

Social and community service 227.8 355.0 311.6 320.4 363.7 483.3 573.41) Education 115.1 202.0 177.6 191.1 206.5 261.4 288.92) Health 68.0 97.7 82.8 86.3 101.1 103.6 131.73) Community, environment,

social welfare and othersocial services 44.7 55.3 51.2 43.0 56.1 118.3 152.8

Economic services 25.2 64.8 71.9 92.9 75.8 67.5 123.11) Agricultural, non-mineral

resources, industrial andcommercial development 4.4 8.2 14.3 24.9 22.5 12.8 40.7

2) Transport and communi-cation 12.1 43.9 39.2 47.3 31.7 35.9 48.5

3) Other economic services 8.7 12.7 18.4 20.7 21.6 18.8 33.9

Public debt 45.7 245.3 332.6 392.3 453.6 603.4 321.4

Unallocable 18.5 27.0 27.8 63.4 74.6 37.4 35.5

Transfer to development fund 20.0 37.5 40.0 80.0 100.0 272.5 480,1

/1 Refers to expenditures paid out of consolidated fund.

Source: Department of Statistics, Singapore

Table 5.1: MONEY SUPPLY AND QUASI MONEY(end of period - S$ millions)

Money SupplyMoney Supply Currency Demand Deposits

and in /3of /4Year Quasi Money Total CirculationL- Private Sector Quasi Money-

1965 1,657.3 890.5 472.6 417.9 766.8

1970 3,782.6 1,574.3 681.9 892.4 2,208.3

1971/l 4,204.6 1,759.9 806.0 953.9 2,444.7

1972 5,281.7 2,384.8 1,004.8 1,380.0 2,896.9

1973/ 6,103.2 2,632.7 1,114.4 1,518.3 3,470.5

1974 6,924.8 2,858.8 1,306.4 1,552.4 4,066.0

/1 Methodological break between March and April 1971.

/2 Adjusted for tchnical break arising from the termination of the Currency Inter-changeability Agreement between Singapore and Malaysia on May 8, 1973.

/3 Figures exclude Singapore's estimated share of the currency issued by theBoard of Commissioners of Currency, Malaya and British Borneo and CommemorativeCoins issued by the Board of Commissioners of Currency, Singapore.

/4 Figures include Singapore dollar certificates of deposit first issued by banksin May 1975.

Source: The Monetary Authority of Singapore

Table 5.2: OFFICIAL FOREIGN RESERVES(end of period - S4 millions)

Government /2Total Official/I (including Statu- Monetary Authorities

Year Foreign Assets- tory Authorities) (including gold tranche)

1965 1,224.4 643.9 580.5

1970 3,099.8 2,201.4 898.4

1971 4,096.3 2,427.1 1,669.2

1972 4,930.9 2,469.9 2,460.9

1973 5,800.2 2,662.7 3,137.5

1974 6,502.9 2,419.2 4,083.7

/1 Valuation at cost.

/2 Figures refer to the foreign assets (including gold tranche) of the MonetaryAuthority of Singapore and the Board of Commissioners of Currency, Singapore.Prior to April 1972, Singapore's estimated share of the foreign assets of theBoard of Commissioners of Currency, Malaya and British Borneo was also included.

Source: The Monetary Authority of Singapore.

Table 6.1: CONSUMER PRICE INDEX(November 1972 = 100)

Transport &All Items Food Clothing Housing Communication Miscellaneous

Period egts 10,000. 4,902 588 1,637 1,069 1,804

1973 117.7 131.4 115.5 104.6 100.3 103.3

1974 144.0 165.1 127.2 119.4 138.0 117.8

1974January 137.1 162.4 125.2 115.3 106.0 110.5April 142.0 160.8 127.3 117.3 142.3 117.7July 143.7 162.2 127.5 117.9 142.5 118.7October 147.6 169.6 127.9 121.7 142.6 120.6

1975January 149.7 173.5 127.5 122.3 142.6 121.4April 146.2 165.6 125.6 122.3 143.5 123.0July 147.5 166.1 124.6 126.2 143.8 126.0October 146.7 162.7 125.1 131.3 144.0 126.0

Source: Department of Statistics, Singapore.

Table 6.2: DEFLATORS OF EXPENDITURE ON GROSS DOMESTIC PRODUCT(1968 100)

1965 1970 1971 1972 1973 1974

TOTAL 97.0 104.0 108.7 114.6 129.0 148.9

Private consumption expenditure 94.6 101.2 104.7 107.4 125.0 142.1

Government consumption expenditure 99.1 103.1 109.5 111.1 113.9 138.0

Gross domestic fixed capital formation 97.7 110.3 117.7 126.7 136.2 162.3

Net imports of goods and services 109.9 109.2 110.5 111.0 12.5.7 184.7

Source: Department of Statistics, Singapore

Table 7.1: QUARTERLY INDEX OF INDUSTRIAL PRODUCTION(1970 = 100, Seasonally Adjusted)

1966 1967 1968 1969 1970 1971 1972 1973 1974 1975

1st Quarter 58.1 67.9 78.3 95.1 111.2 127.1 161.7 171.9 158.6

2nd Quarter 57.6 69.0 82.8 98.2 119.6 135.9 163.9 173.9 156.0

3rd Quarter 60.5 73.0 86.6 100.4 120.4 147.5 164.9 174.9

4th Quarter 57.3 65.6 75.3 91.2 104.8 124.3 153.6 169.1 166.6

Note: Quarterly index numbers prior to 3rd quarter 1970 were obtained by splicing the index series with 1968base to the new index series.

Source: Department of Statistics, S-Lngapore