Financial Report- Key Economic Indicators for Singapore


1) Introduction:

This financial report shows the key economic indicators of Singapore, showing the effects of the downturn on expenditure in the current Singapore society, which is plagued by the global economy recession. Following the global economic recession that struck every country since the third quarter of 2009, Singapore's economy has also taken a serious plunge, which is the most serious shrink in economy for Singapore ever since the Great Depression during the 1930s.

Statistics below show the economic shrinkage for each quarter in 2008, and the first two quarters of 2009. Analysis of the data, as well as the evaluation of the repercussions of the statistics, is also included in this financial report. For this financial report, we would be focusing on Singapore’s Gross Domestic Product (GDP).


2) Gross Domestic Product (GDP)

The Gross Domestic Product (GDP) is the market value of all final goods and services made by the nation in a year. This is a basic measure of a country's economic performance, to determine whether a country is growing or shrinking in terms of its economy, or in other words, the national income. Final goods refer to goods that are produced and sold ultimately as one, but not as a single component or part. "Gross" refer to before deductions, in this case before subtracting away the deprecation of capital stock. "Domestic" means within the countries, which means that Domestic Products refer to products produced within the country only. GDP is most commonly counted as the total expenditures for all final goods and services produced within the country in a year. The formula is shown below:

GDP = private consumption + gross investment + government spending + (exports − imports)

Below is a table showing Singapore’s GDP for 2008:

Gross Domestic Product (GDP)	2008 Q2	   2008 Q3    2008 Q4	 2009 Q1  2009 Q2
At Current Market Prices ($m)  63,292.0  64,637.7    64,309.1	59,237.2  61,204.4
At 2000 Market Prices ($m)     58,451.9  59,376.0    56,581.8	53,485.2  56,399.1
Growth per quarter (%)	          2.5       0.0	       - 4.2	 - 9.5	    - 3.5

3) Analysis of data and Evaluation of repercussions

From Singapore’s GDP of each quarter, starting from the second quarter of 2008 to second quarter of 2009, we can see that the GDP is starting to decline from the third quarter of 2008 till the first quarter of 2009. From then onwards, the economy started picking up, thus having a 6% increase in GDP from the first quarter to third quarter of 2009. During the 2nd quarter of 2008, the economy is still boosting, although there were already some signs of strains. When the global economic recession affected the US, and then the global economy in the 3rd quarter of 2008, the GDP started declining because of the decrease in demand by the other countries, thus causing a decline in production and eventually, the GDP. This declining trend continued to 2009, in which it was the worst in the first quarter of 2009, reaching –9.5%. This is when the economy was at rock bottom. During the 2nd quarter, the economy saw a sudden increase, thus causing a huge increase in global demand, thus the GDP went up to -3.5%. This truly reflects the trend of the global economy, which started declining in the last two quarters of 2008, but slowly picked up from the 2nd quarter of 2009.

From this, we can see that the economy of Singapore depends directly on the US economy. The Lehman brother collapse in August 2008 has caused widespread panic among the investors, thus leading to a sudden and severe plunge in the 3rd quarter of 2008, due to the decrease in number of investments. Since then, many other banks either declared bankrupt or almost collapsed, some of which included Bank of Switzerland. This global recession, which was the most serious since the 1930s Great Depression, continued in 2008 and 1st quarter of 2009. However, due to the help from the US government, as well as the European Union, both of whom brought shares from collapsing companies to prevent them from going bankrupt, the global economy managed to pick up in the 2nd quarter of 2009. China also helped boost Asia’s economy in terms of production and exports. Thus, Singapore’s economy and GDP also fluctuated along with the global economy.

However, Singapore’s GDP in the 2nd quarter is still a negative digit, and is very far from what it was before the global economic recession. This shows that the trend of the global economy is still unclear, as we might not know if the economy is going to turn for the better, or for the worse. Despite this, we can see that in the third quarter of 2009, the economy is slowly recovering. Although the GDP for the 3rd quarter is still not calculated, we can expect an increase in the GDP, and thus the economy, for this quarter, after doing well in the 2nd quarter of 2009 and the first half of 2009’s 3rd quarter (July and August). This clearly shows that Singapore’s economy is slowly getting out of the negative effects of the economic recession. Since Singapore’s economy depends on the US’, this means that the US economy, and eventually the global economy, will start to pick up soon, possibly in the 3rd and 4th quarter of 2009, as well as the 1st quarter of 2010.

4) Conclusion

As Singapore’s economy depends on the US and global one, we can only hope for the US economy to turn for the better, after how well we have done in the 2nd quarter of 2009. However, despite this increase in the economy, we still have to be careful, as the global economy, and Singapore’s, is still on a very dangerous end, and might turn for the worse at any moment. Thus, we can only hope for the best, but prepare for the worst.

5) References

• Ministry of Trade and Industry:

http://app.mti.gov.sg/default.asp?id=489

• Singapore Statistics:

http://www.singstat.gov.sg/stats/keyind.html

• Wikipedia- Gross Domestic Product

http://en.wikipedia.org/wiki/GDP

6) Done By:

IDS ’09 eNewsletter Editorial Team (2I3 Group 3):

Nicholas Lau (2I311)
Lee Kun Siang (21312)
Leslie Lee (2I313)
Lee Zi Jing (2I314)
Lim Jun Ming (2I315)



posted by blackfire123 at 9:28 PM