Panorama econòmic

Economic indicators

Singapore's economy is characterised by excellent finances and a high degree of openness, with the country being highly dependent on international trade. According to preliminary government data, the economy showed resilience in 2024, growing by around 4.4% (up from 1.8% in 2023), supported by government measures such as household transfers to offset GST hikes and a package to boost retirement savings for citizens over 50. GDP growth was driven by wholesale trade, finance & insurance, and manufacturing, particularly the electronics cluster and machinery segment, boosted by the global electronics cycle. The finance & insurance sector benefited from increased trading activity and strong net fees and commissions. In contrast, retail trade and food & beverage services contracted, partly due to locals spending more on overseas travel (data Ministry of Industry and Trade). Considering the external and domestic economic environment, and barring any downside risks, the Singapore economy is projected to grow by 2.5% over the forecast period (IMF).

In recent years, government expenditure has remained hefty, driven by increased development spending, particularly in areas such as transport infrastructure, healthcare, and the environment. Additionally, support measures were introduced to assist households and businesses in dealing with the challenges posed by high inflation. Nevertheless, the government budget returned to positive territory in 2023 and continued the positive trend last year as the fiscal surplus for FY2024 has been revised to SGD 6.4 billion, or 0.9% of GDP. Operating revenue for FY2024 was revised up by 7.3% to SGD 116.6 billion, marking a 12.7% increase from FY2023. The stronger performance was driven by corporate income tax, which collected SGD 30.9 billion, surpassing the SGD 28 billion estimate (official governmental figures). To support businesses and individuals, rebates of 50% on corporate income tax (capped at SGD 40,000) and 60% on personal income tax (capped at SGD 200) will be provided for the Year of Assessment 2025. The corporate tax rebate mirrors the previous year’s. The Budget also introduced new tax incentives to revitalize the Singapore equity market, including a generous rebate for newly listed companies. Additionally, sector-specific measures for financial services, real estate, and maritime shipping were introduced to enhance Singapore’s competitiveness in these key areas. Although the recorded public debt appears elevated on paper, at 175.2% of GDP in 2024 (IMF), it primarily serves the purpose of establishing a safe domestic asset market. This debt is predominantly comprised of long-term bonds and securities. Furthermore, substantial reserves accumulated from prior fiscal surpluses (ranging from 200-300% of GDP) are available to address infrequent budget deficits when necessary. Meanwhile, inflation moderated in 2024, with core inflation dropping from 4.6% in 2023 to 2-3%, and overall inflation falling from 4.8% to 2.5%. Core inflation is now forecast to average 1–2% in 2025 (official government data).

Although per capita wealth in Singapore is amongst the highest in the region, unemployment has appeared due to structural economic changes (outsourcing of low-skilled work) and the COVID-19 crisis. However, despite ongoing retrenchments, especially in the tech sector, unemployment remained low in 2024 (at 2% in 2024), and real wages grew for median and lower-income workers after 2023 reductions. The country has one of the highest GDP per capita in the world, estimated at USD 148,185 in 2024 by the IMF (PPP). Social challenges include rising income inequality and social discontent caused by overpopulation, high competition for employment and housing, lack of skilled labour, an ageing population, and distrust towards immigration.

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