SINGAPORE: Singapore economy grew 3.5% in 2017 supported by the 3.1% growth in the fourth quarter from a year earlier, easing from growth of 5.4% in the previous quarter. A continued rise in demand for electronic gadgets, growth in exports and boosted investment spending due to the recent US tax reform have all been contributors.
While growth is expected to stabilise in 2018, Singapore’s key industries and their digitisation and transformation, are likely facilitators of longer term sustainable growth. However, here, a key concern is the job market, which has experienced an upward trend in the long-term unemployment rate for Singaporean and permanent residents in the past two years, despite showing positive signs. The labour market is going through a transition as old industries fade, technologies reduce labour demand and new growth industries such as fintech, creative IT solutions, aerospace, robotics and advanced manufacturing are less labour-intensive.
A potential dampening effect on growth and raise in inflation could be from the expected increase in government expenditure through investments in the economy, on social services and on infrastructure in the coming years. There may also be a tax hike in the Goods & Services tax, potentially from 7% to 8%. But this is where we can provide value through our extensive accounting and tax knowledge – helping you stay compliant and reduce the risk of penalties or liability.
