Economic trends
Singapore's economy was particularly affected by the international financial crisis, because of its very extreme financialization, and the very large extent of openness, and thus its dependence on international trade. While GDP growth was above 7.5% from 2004 to 2007, it dropped to around 1% in 2008 and was very reduced in 2009 because of the crisis. The country should be back on the growth track in 2010-2011.
The GDP percentage of the current-account surplus should drop in 2009-2010. The Singaporean dollar will continue to appreciate in relation to the American dollar, in accordance to the objectives of the exchange rate policy of the Monetary Authority of Singapore (the Central Bank).
To maintain its competitive position despite the increase in salaries, the government seeks to promote activities with high added value (like biotechnology, research and development and pharmaceutical products), in the manufacturing and services sectors.
After a long period of full employment, the level of unemployment rose to 4.6% in 2003, then dropped to 3% in June 2008, because of the decrease in economic growth. The current financial crisis, together with structural economic changes (relocation of unskilled labor) has caused a new rise in unemployment. However, the level of wealth per capita is one of the highest in the region.
Main branches of industry
Singapore's economy is highly industrialized. The biggest sector is the manufacturing sector, followed by the wholesale and retail sector, business services, transport and communication and financial services. The electronics and petrochemical industries are dominant. The services sector contributes more than two-thirds of the GDP and the industrial sector around one-third. The primary sector is almost nonexistent (except for the cultivation of orchids, vegetables and fish for aquariums). Singapore does not have any mineral resources.
Singapore is a regional trading hub. The Port of Singapore is amongst the world's biggest and is the second traffic center for container transshipment, behind Hong Kong.
International trade
A real warehouse, Singapore is highly dependent on external trade. The strategy adopted by the country is to promote export while being careful to minimize barriers to imports. Singapore signed the Asian Free Trade Area agreements (AFTA in the ASEAN context) and bilateral agreements.
Singapore imports machinery and equipment, mineral fuels, chemical products, food commodities and consumption goods from Malaysia, United States, China, Japan, South Korea, Indonesia and Saudi Arabia. The country exports machinery and equipment (electronic), consumption goods, pharmaceutical products and mineral fuels to Malaysia, Indonesia, Hong Kong, China, the United States, Japan and Australia.
Singapore showed a trade surplus in 2008, a trend which should continue in the coming years, but at a lower rate.
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