## IMF Executive Board Concludes 2019 Article IV Consultation with Singapore

_IMF News, July 15, 2019_

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## Bibliographic details
- Published: July 15, 2019

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### Macroeconomic performance and recent developments
- 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.

### Outlook and risks
- Short-term projection: growth is expected to slow to 2 percent in 2019.
- Medium-term projection: growth should stabilize around 2½ percent.
- Drivers:
  - With less support from external demand, growth drivers are projected to shift back to domestic demand.
  - Investment is expected to pick up with the push for digitalization and new industry-related projects.
  - Over the medium term, growth increasingly driven by modern services alongside other trade-related sectors.
- Risks: tilted to the downside and mainly external, including:
  - a tightening of global financial conditions,
  - escalation of sustained trade tensions,
  - deceleration of global growth.

### Executive Board assessment and policy recommendations
- Directors commended sound macroeconomic management and strong policy frameworks contributing to robust and resilient performance and reduced income inequality.
- Fiscal policy:
  - 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.
  - Directors recognized higher government spending would support external rebalancing given significant leakages through trade and remittances.
  - A few Directors called for greater use of fiscal policy for a more balanced growth.
- Monetary policy:
  - Directors supported a broadly neutral monetary policy stance and recommended monetary policy remain data-dependent.
  - 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.
  - Directors welcomed authorities’ commitment to begin publishing foreign exchange intervention data to improve transparency.
- Financial sector and macroprudential policy:
  - Directors welcomed FSAP findings and supported main recommendations.
  - Singapore’s financial system considered resilient, underpinned by a strong regulatory and supervisory framework.
  - Liquidity stress tests reveal vulnerability in U.S. dollar liquidity; Directors encouraged prioritizing bolstering banks’ foreign exchange liquidity.
  - Directors urged further progress in enhancing the bank resolution framework by devoting more resources to the Monetary Authority of Singapore’s resolution unit.
  - Directors took positive note of reforms to reinforce payment system safety.
  - 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.
- Financial innovation and integrity:
  - Directors supported balancing promotion of financial innovation against preserving financial stability, investor protection, and financial integrity.
  - Calls for continued vigilance to guard against money laundering/terrorism financing and cyber-risk and to minimize reputational risk.
- Structural reforms and social considerations:
  - Directors commended structural reform agenda to raise productivity and turn Singapore into a global innovation hub through incentives to automate and innovate.
  - Noted programs to drive digitalization and technological adoption among businesses and to promote lifelong learning and skill enhancement among individuals.
  - 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.
  - Emphasized labor market policies should remain nimble to the rapidly changing nature of work.
  - Directors welcomed authorities’ efforts to reduce Singapore’s carbon emissions.

### Selected economic and financial indicators (key figures and projections)
- Main goods exports (2018, percent of total exports):
  - Electronic products: 30 percent
  - Mineral fuels: 19 percent
  - Chemical products: 14 percent
- Top three destinations for goods exports (2018, percent of gross goods exports):
  - China: 12.2 percent
  - Hong Kong SAR: 11.8 percent
  - Malaysia: 10.9 percent

- Projections and historical values (Real GDP growth — percentage change):
  - 2014: 3.9
  - 2015: 2.9
  - 2016: 3.0
  - 2017: 3.7
  - 2018: 3.1
  - 2019: 2.0
  - 2020: 2.3

- Total domestic demand (percentage change):
  - 2014: 2.1
  - 2015: 0.4
  - 2016: 5.5
  - 2017: 6.5
  - 2018: 1.1
  - 2019: 3.3

- Gross fixed investment (percentage change):
  - 2014: 4.2
  - 2015: 6.4
  - 2016: -4.0
  - 2017: 2.8

- Change in inventories (contribution to GDP growth, percentage points):
  - 2014: -0.9
  - 2015: -3.0
  - 2016: 1.4
  - 2017: 0.3
  - 2018: 0.0

- Net exports (contribution to GDP growth, percentage points):
  - 2014: -1.1
  - 2015: 0.1
  - 2016: 0.7

- Saving and investment (percent of GDP):
  - Gross national saving:
    - 2014: 47.4
    - 2015: 42.6
    - 2016: 44.2
    - 2017: 44.5
    - 2018: 43.5
    - 2019: 43.3
  - Gross domestic investment:
    - 2014: 29.4
    - 2015: 25.4
    - 2016: 26.7
    - 2017: 28.2
    - 2018: 26.6
    - 2019: 27.7
    - 2020: 27.5

- Inflation and unemployment (period average, percent):
  - CPI inflation:
    - 2016: -0.5
    - 2017: 0.6
    - 2018: 1.3
  - CPI inflation, excluding food and energy 1/:
    - 2014: -0.7
    - 2015: -0.1
    - 2016: -0.2
    - 2017: 1.2
  - MAS core inflation 1/:
    - 2014: 1.9
    - 2015: 0.9
    - 2016: 1.5
    - 2017: 1.7
  - Unemployment rate:
    - 2018: 2.2

- Central government finances (percent of GDP) 2/:
  - Revenue:
    - 2014: 17.1
    - 2015: 17.3
    - 2016: 18.5
    - 2017: 19.1
    - 2018: 18.1
    - 2019: 18.2
  - Expenditure:
    - 2014: 12.2
    - 2015: 14.1
    - 2016: 15.2
    - 2017: 14.2
    - 2018: 14.4
  - Net lending/borrowing:
    - 2014: 4.9
    - 2015: 4.0
  - Net lending/borrowing, excluding nonproduced assets:
    - 2014: 1.8
  - Primary balance 3/:
    - 2014: -2.6
    - 2015: -1.5
    - 2016: -2.3
    - 2017: -2.7
    - 2018: -2.9

- Money and credit (end of period, percent change):
  - Broad money (M2):
    - 2014: 7.6
    - 2015: 8.4
    - 2016: 4.1
    - 2017: 5.1
  - Credit to private sector:
    - 2014: 7.0
    - 2015: 2.5
  - Three-month S$ SIBOR rate (percent): not shown (…).

- Balance of payments (US$ billions):
  - Current account balance:
    - 2014: 56.5
    - 2015: 53.0
    - 2016: 55.7
    - 2017: 55.4
    - 2018: 65.1
    - 2019: 58.7
    - 2020: 61.2
  - (In percent of GDP):
    - 2014: 18.0
    - 2015: 17.2
    - 2016: 17.5
    - 2017: 16.4
    - 2018: 17.9
    - 2019: 15.8
  - Goods balance:
    - 2014: 86.7
    - 2015: 92.6
    - 2016: 87.1
    - 2017: 92.5
    - 2018: 98.4
    - 2019: 96.5
    - 2020: 100.0
  - Exports, f.o.b.:
    - 2014: 450.6
    - 2015: 396.1
    - 2016: 371.4
    - 2017: 408.5
    - 2018: 459.7
    - 2019: 469.3
    - 2020: 484.6
  - Imports, f.o.b.:
    - 2014: -363.9
    - 2015: -303.7
    - 2016: -284.3
    - 2017: -316.0
    - 2018: -361.4
    - 2019: -372.8
    - 2020: -384.6
  - Financial account balance 4/:
    - 2014: 47.3
    - 2015: 51.5
    - 2016: 26.0
    - 2017: 49.4
    - 2018: 52.7
    - 2019: 53.3
  - Overall balance 4/:
    - 2014: 6.8
    - 2015: -1.8
    - 2016: 27.4
    - 2017: 12.5
    - 2018: 6.0
    - 2019: 8.0

- Gross official reserves (US$ billions) 5/:
  - 2014: 256.9
  - 2015: 247.7
  - 2016: 246.6
  - 2017: 279.9
  - 2018: 287.7
  - 2019: 260.9
  - 2020: 270.9
  - (In months of imports) 6/:
    - 2014: 6.6
    - 2015: 6.7
    - 2016: 6.2
    - 2017: 6.1
    - 2018: 5.4

- Singapore dollar/U.S. dollar exchange rate (period average):
  - 2014: 1.27
  - 2015: 1.37
  - 2016: 1.38
  - 2017: 1.35

- Real effective exchange rate (percentage change) 7/:
  - 2014: -0.6
  - 2015: -1.2

- Memorandum item — Nominal GDP (in billions of Singapore Dollars):
  - 2014: 398.9
  - 2015: 423.4
  - 2016: 439.4
  - 2017: 467.3
  - 2018: 491.2
  - 2019: 507.2
  - 2020: 525.6
  - Growth (%): 6.3

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 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.

*IMF Press Release No. 19/277 — July 15, 2019 — IMF Executive Board Concludes 2019 Article IV Consultation with Singapore*

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## References

- [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)

_Source: https://www.imf.org/en/news/articles/2019/07/15/pr19277-singapore-imf-executive-board-concludes-2019-article-iv-consultation_