{
  "title": "IMF Executive Board Concludes 2019 Article IV Consultation with Singapore",
  "publication": "IMF News, July 15, 2019",
  "sourceUrl": "https://www.imf.org/en/news/articles/2019/07/15/pr19277-singapore-imf-executive-board-concludes-2019-article-iv-consultation",
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  "summary": "Notes (as presented in source) - MAS core inflation excludes the costs of accommodation and private road transport. - IMF staff estimates on a calendar year basis following GFSM 2014. - Net lending/borrowing excluding net investment return contribution (NIRC). - Following the BPM6 sign convention, a",
  "publishDate": "2019-07-15",
  "sections": [
    {
      "heading": "Macroeconomic performance and recent developments",
      "content": "- GDP per capita more than doubled in the last twenty years (no numeric year-over-year given beyond 2018 value).\n- GDP per capita (2018): US$64,567.\n- Nominal GDP (2018): US$364 billion.\n- Population (2018): 5.64 million.\n- Economic activity moderated in 2018: growth tapered to 3.1 percent in 2018 after a surge in domestic demand in 2017.\n- Growth decelerated to 1.2 percent in 2019Q1 compared to the previous year, as manufacturing decelerated.\n- Labor market in 2018: unemployment declined, employment expanded, and real wages grew (no further numeric breakdown provided).\n- MAS core inflation slowed slightly to 1.6 percent on year-on-year basis in 2019Q1.\n- Headline inflation pressures remained modest in 2018; decline in electricity prices and lower global oil prices contributed to lower inflation.\n- Current account surplus declined in 2019Q1 from a year ago but remains large as a share of GDP."
    },
    {
      "heading": "Outlook and risks",
      "content": "- Short-term projection: growth is expected to slow to 2 percent in 2019.\n- Medium-term projection: growth should stabilize around 2½ percent.\n- Drivers:\n  - With less support from external demand, growth drivers are projected to shift back to domestic demand.\n  - Investment is expected to pick up with the push for digitalization and new industry-related projects.\n  - Over the medium term, growth increasingly driven by modern services alongside other trade-related sectors.\n- Risks: tilted to the downside and mainly external, including:\n  - a tightening of global financial conditions,\n  - escalation of sustained trade tensions,\n  - deceleration of global growth."
    },
    {
      "heading": "Executive Board assessment and policy recommendations",
      "content": "- Directors commended sound macroeconomic management and strong policy frameworks contributing to robust and resilient performance and reduced income inequality.\n- Fiscal policy:\n  - Directors supported the use of Singapore’s ample fiscal space over the medium and long terms to address age-related spending, climate change, expansion and renewal of infrastructure, and programs to help workers and firms adapt to technological change, while preserving adequate fiscal buffers.\n  - Directors recognized higher government spending would support external rebalancing given significant leakages through trade and remittances.\n  - A few Directors called for greater use of fiscal policy for a more balanced growth.\n- Monetary policy:\n  - Directors supported a broadly neutral monetary policy stance and recommended monetary policy remain data-dependent.\n  - If downside risks materialize, fiscal policy should be the first line of defense and macroprudential policy could be eased while maintaining caution vis-à-vis financial stability issues.\n  - Directors welcomed authorities’ commitment to begin publishing foreign exchange intervention data to improve transparency.\n- Financial sector and macroprudential policy:\n  - Directors welcomed FSAP findings and supported main recommendations.\n  - Singapore’s financial system considered resilient, underpinned by a strong regulatory and supervisory framework.\n  - Liquidity stress tests reveal vulnerability in U.S. dollar liquidity; Directors encouraged prioritizing bolstering banks’ foreign exchange liquidity.\n  - Directors urged further progress in enhancing the bank resolution framework by devoting more resources to the Monetary Authority of Singapore’s resolution unit.\n  - Directors took positive note of reforms to reinforce payment system safety.\n  - Directors welcomed proactive use of macroprudential and other property-related measures, commended continued monitoring, and suggested eliminating residency-based differentiation for the Additional Buyer’s Stamp Duty, then phasing out the measure once systemic risks dissipate.\n- Financial innovation and integrity:\n  - Directors supported balancing promotion of financial innovation against preserving financial stability, investor protection, and financial integrity.\n  - Calls for continued vigilance to guard against money laundering/terrorism financing and cyber-risk and to minimize reputational risk.\n- Structural reforms and social considerations:\n  - Directors commended structural reform agenda to raise productivity and turn Singapore into a global innovation hub through incentives to automate and innovate.\n  - Noted programs to drive digitalization and technological adoption among businesses and to promote lifelong learning and skill enhancement among individuals.\n  - Called for continued monitoring of social impact of economic transformation and greater efforts to incentivize uptake of existing programs, especially among those more at risk of displacement by automation.\n  - Emphasized labor market policies should remain nimble to the rapidly changing nature of work.\n  - Directors welcomed authorities’ efforts to reduce Singapore’s carbon emissions."
    },
    {
      "heading": "Selected economic and financial indicators (key figures and projections)",
      "content": "- Main goods exports (2018, percent of total exports):\n  - Electronic products: 30 percent\n  - Mineral fuels: 19 percent\n  - Chemical products: 14 percent\n- Top three destinations for goods exports (2018, percent of gross goods exports):\n  - China: 12.2 percent\n  - Hong Kong SAR: 11.8 percent\n  - Malaysia: 10.9 percent\n\n- Projections and historical values (Real GDP growth — percentage change):\n  - 2014: 3.9\n  - 2015: 2.9\n  - 2016: 3.0\n  - 2017: 3.7\n  - 2018: 3.1\n  - 2019: 2.0\n  - 2020: 2.3\n\n- Total domestic demand (percentage change):\n  - 2014: 2.1\n  - 2015: 0.4\n  - 2016: 5.5\n  - 2017: 6.5\n  - 2018: 1.1\n  - 2019: 3.3\n\n- Gross fixed investment (percentage change):\n  - 2014: 4.2\n  - 2015: 6.4\n  - 2016: -4.0\n  - 2017: 2.8\n\n- Change in inventories (contribution to GDP growth, percentage points):\n  - 2014: -0.9\n  - 2015: -3.0\n  - 2016: 1.4\n  - 2017: 0.3\n  - 2018: 0.0\n\n- Net exports (contribution to GDP growth, percentage points):\n  - 2014: -1.1\n  - 2015: 0.1\n  - 2016: 0.7\n\n- Saving and investment (percent of GDP):\n  - Gross national saving:\n    - 2014: 47.4\n    - 2015: 42.6\n    - 2016: 44.2\n    - 2017: 44.5\n    - 2018: 43.5\n    - 2019: 43.3\n  - Gross domestic investment:\n    - 2014: 29.4\n    - 2015: 25.4\n    - 2016: 26.7\n    - 2017: 28.2\n    - 2018: 26.6\n    - 2019: 27.7\n    - 2020: 27.5\n\n- Inflation and unemployment (period average, percent):\n  - CPI inflation:\n    - 2016: -0.5\n    - 2017: 0.6\n    - 2018: 1.3\n  - CPI inflation, excluding food and energy 1/:\n    - 2014: -0.7\n    - 2015: -0.1\n    - 2016: -0.2\n    - 2017: 1.2\n  - MAS core inflation 1/:\n    - 2014: 1.9\n    - 2015: 0.9\n    - 2016: 1.5\n    - 2017: 1.7\n  - Unemployment rate:\n    - 2018: 2.2\n\n- Central government finances (percent of GDP) 2/:\n  - Revenue:\n    - 2014: 17.1\n    - 2015: 17.3\n    - 2016: 18.5\n    - 2017: 19.1\n    - 2018: 18.1\n    - 2019: 18.2\n  - Expenditure:\n    - 2014: 12.2\n    - 2015: 14.1\n    - 2016: 15.2\n    - 2017: 14.2\n    - 2018: 14.4\n  - Net lending/borrowing:\n    - 2014: 4.9\n    - 2015: 4.0\n  - Net lending/borrowing, excluding nonproduced assets:\n    - 2014: 1.8\n  - Primary balance 3/:\n    - 2014: -2.6\n    - 2015: -1.5\n    - 2016: -2.3\n    - 2017: -2.7\n    - 2018: -2.9\n\n- Money and credit (end of period, percent change):\n  - Broad money (M2):\n    - 2014: 7.6\n    - 2015: 8.4\n    - 2016: 4.1\n    - 2017: 5.1\n  - Credit to private sector:\n    - 2014: 7.0\n    - 2015: 2.5\n  - Three-month S$ SIBOR rate (percent): not shown (…).\n\n- Balance of payments (US$ billions):\n  - Current account balance:\n    - 2014: 56.5\n    - 2015: 53.0\n    - 2016: 55.7\n    - 2017: 55.4\n    - 2018: 65.1\n    - 2019: 58.7\n    - 2020: 61.2\n  - (In percent of GDP):\n    - 2014: 18.0\n    - 2015: 17.2\n    - 2016: 17.5\n    - 2017: 16.4\n    - 2018: 17.9\n    - 2019: 15.8\n  - Goods balance:\n    - 2014: 86.7\n    - 2015: 92.6\n    - 2016: 87.1\n    - 2017: 92.5\n    - 2018: 98.4\n    - 2019: 96.5\n    - 2020: 100.0\n  - Exports, f.o.b.:\n    - 2014: 450.6\n    - 2015: 396.1\n    - 2016: 371.4\n    - 2017: 408.5\n    - 2018: 459.7\n    - 2019: 469.3\n    - 2020: 484.6\n  - Imports, f.o.b.:\n    - 2014: -363.9\n    - 2015: -303.7\n    - 2016: -284.3\n    - 2017: -316.0\n    - 2018: -361.4\n    - 2019: -372.8\n    - 2020: -384.6\n  - Financial account balance 4/:\n    - 2014: 47.3\n    - 2015: 51.5\n    - 2016: 26.0\n    - 2017: 49.4\n    - 2018: 52.7\n    - 2019: 53.3\n  - Overall balance 4/:\n    - 2014: 6.8\n    - 2015: -1.8\n    - 2016: 27.4\n    - 2017: 12.5\n    - 2018: 6.0\n    - 2019: 8.0\n\n- Gross official reserves (US$ billions) 5/:\n  - 2014: 256.9\n  - 2015: 247.7\n  - 2016: 246.6\n  - 2017: 279.9\n  - 2018: 287.7\n  - 2019: 260.9\n  - 2020: 270.9\n  - (In months of imports) 6/:\n    - 2014: 6.6\n    - 2015: 6.7\n    - 2016: 6.2\n    - 2017: 6.1\n    - 2018: 5.4\n\n- Singapore dollar/U.S. dollar exchange rate (period average):\n  - 2014: 1.27\n  - 2015: 1.37\n  - 2016: 1.38\n  - 2017: 1.35\n\n- Real effective exchange rate (percentage change) 7/:\n  - 2014: -0.6\n  - 2015: -1.2\n\n- Memorandum item — Nominal GDP (in billions of Singapore Dollars):\n  - 2014: 398.9\n  - 2015: 423.4\n  - 2016: 439.4\n  - 2017: 467.3\n  - 2018: 491.2\n  - 2019: 507.2\n  - 2020: 525.6\n  - Growth (%): 6.3\n\nNotes (as presented in source)\n- MAS core inflation excludes the costs of accommodation and private road transport.\n- IMF staff estimates on a calendar year basis following GFSM 2014.\n- Net lending/borrowing excluding net investment return contribution (NIRC).\n- Following the BPM6 sign convention, a positive entry implies net outflows.\n- The projections for official reserves for 2019 and onward reflect the transfers of S$45 billion from the official foreign reserves to GIC Pte. Ltd., as announced in May 8, 2019.\n- In months of following year's imports of goods and services.\n- Increase is an appreciation.\n\nIMF Press Release No. 19/277 — July 15, 2019 — IMF Executive Board Concludes 2019 Article IV Consultation with Singapore\n\n---\n\n\n References\n\n- https://www.imf.org/-/media/images/imf/bios/imfboard.jpg\n- The Executive Board\n- Singapore and the IMF\n- IMF Policy Advice -- A Factsheet\n- Press Releases\n- PRESS CENTER\n- http://www.imf.org/external/np/sec/misc/qualifiers.htm\n- https://www.imf.org/en/home\n\nSource: https://www.imf.org/en/news/articles/2019/07/15/pr19277-singapore-imf-executive-board-concludes-2019-article-iv-consultation"
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    "Published: July 15, 2019",
    "GDP per capita more than doubled in the last twenty years (no numeric year-over-year given beyond 2018 value).",
    "GDP per capita (2018): US$64,567.",
    "Nominal GDP (2018): US$364 billion.",
    "Population (2018): 5.64 million.",
    "Economic activity moderated in 2018: growth tapered to 3.1 percent in 2018 after a surge in domestic demand in 2017.",
    "Growth decelerated to 1.2 percent in 2019Q1 compared to the previous year, as manufacturing decelerated.",
    "Labor market in 2018: unemployment declined, employment expanded, and real wages grew (no further numeric breakdown provided).",
    "MAS core inflation slowed slightly to 1.6 percent on year-on-year basis in 2019Q1.",
    "Headline inflation pressures remained modest in 2018; decline in electricity prices and lower global oil prices contributed to lower inflation.",
    "Current account surplus declined in 2019Q1 from a year ago but remains large as a share of GDP.",
    "Short-term projection: growth is expected to slow to 2 percent in 2019.",
    "Medium-term projection: growth should stabilize around 2½ percent.",
    "Drivers:",
    "Risks: tilted to the downside and mainly external, including:",
    "Directors commended sound macroeconomic management and strong policy frameworks contributing to robust and resilient performance and reduced income inequality.",
    "Fiscal policy:",
    "Monetary policy:",
    "Financial sector and macroprudential policy:",
    "Financial innovation and integrity:",
    "Structural reforms and social considerations:",
    "Main goods exports (2018, percent of total exports):",
    "Top three destinations for goods exports (2018, percent of gross goods exports):",
    "Projections and historical values (Real GDP growth — percentage change):",
    "Total domestic demand (percentage change):",
    "Gross fixed investment (percentage change):",
    "Change in inventories (contribution to GDP growth, percentage points):",
    "Net exports (contribution to GDP growth, percentage points):",
    "Saving and investment (percent of GDP):",
    "Inflation and unemployment (period average, percent):",
    "Central government finances (percent of GDP) 2/:",
    "Money and credit (end of period, percent change):",
    "Balance of payments (US$ billions):",
    "Gross official reserves (US$ billions) 5/:",
    "Singapore dollar/U.S. dollar exchange rate (period average):",
    "Real effective exchange rate (percentage change) 7/:",
    "Memorandum item — Nominal GDP (in billions of Singapore Dollars):",
    "MAS core inflation excludes the costs of accommodation and private road transport.",
    "IMF staff estimates on a calendar year basis following GFSM 2014.",
    "Net lending/borrowing excluding net investment return contribution (NIRC).",
    "Following the BPM6 sign convention, a positive entry implies net outflows.",
    "The projections for official reserves for 2019 and onward reflect the transfers of S$45 billion from the official foreign reserves to GIC Pte. Ltd., as announced in May 8, 2019.",
    "In months of following year's imports of goods and services.",
    "Increase is an appreciation.",
    "[https://www.imf.org/-/media/images/imf/bios/imfboard.jpg](https://www.imf.org/-/media/images/imf/bios/imfboard.jpg)",
    "[The Executive Board](https://www.imf.org/external/np/sec/memdir/eds.aspx)",
    "[Singapore and the IMF](http://www.imf.org/external/country/SGP/index.htm)",
    "[IMF Policy Advice -- A Factsheet](https://www.imf.org/en/about/factsheets/imf-surveillance)",
    "[Press Releases](https://www.imf.org/en/news/searchnews)",
    "[PRESS CENTER](http://presscenter.imf.org/)",
    "[http://www.imf.org/external/np/sec/misc/qualifiers.htm](http://www.imf.org/external/np/sec/misc/qualifiers.htm)",
    "[https://www.imf.org/en/home](https://www.imf.org/en/home)"
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