Business Monitor International


Singapore Business Forecast Report

Published 26 August 2014

  • 49 pages
  • Instant access to your report online and PDF format through your account library
  • Includes 3 free updated quarterly reports
 
$1,195.00
Singapore Business Forecast Report

Core Views

  • Singapore's ongoing restructuring drive continues, and the PAP-led government is highly unlikely to abandon its path even amid an increasingly tight labour market. While it may not have completely arrested the erosion of voter support that it has witnessed over recent years, we nevertheless believe that the PAP will retain broad power for the foreseeable future.

  • Singapore's economy expanded by a solid 5.1% year-on-year (y-o-y) according to initial real GDP estimates, with much of the growth driven by strong construction activity. That said, we continue to believe that prospects for a substantial trade recovery over the coming quarters are likely limited , as external demand conditions remain challenging.

Key Forecast Changes

  • Given our infrastructure team's relatively sanguine view on the construction sector, and following a better-than-expected performance in Q114, we have incrementally upgraded our full-year real GDP growth forecast to 3.4% from 3.2% previously.

Key Risks To Outlook

  • While we believe that Singapore's extremely strong external balance sheet will shield it from any major crisis, we nevertheless note that the city-state is highly vulnerable to global economic shocks. In particular, should global credit markets seize up, the richly valued Singaporean property market could be hard hit, which would have downside implications for the broader economy.

  • Singapore's growing exposure to China, via both trade and financial linkages, poses an increasing risk to the broader economy in the event that the mainland economy experiences a full-fledged economic or financial crisis.

Political SWOT Analysis

Strengths

  • Singapore enjoys a very stable political system, following the country's second change of leadership in 40 years, which saw Lee Hsien Loong - son of the nation's founder Lee Kuan Yew - take over as prime minister in 2004.

  • Official promises have been made to eradicate Singapore's reputation as an overprotective...

Table of Contents

Executive Summary
5
Core Views
5
Major Forecast Changes
5
Key Risks To Outlook
5
Chapter 1: Political Outlook
7
SWOT Analysis
7
BMI Political Risk Ratings
7
Domestic Politics
8
Despite Slipping Vote Share, PAP To Retain Broad Control
8
Table: Political Overview
8
Long-Term Political Outlook
9
Political Liberalisation Likely To Be Slow Over Next Decade
9
Chapter 2: Economic Outlook
13
SWOT Analysis
13
BMI Economic Risk Ratings
13
Economic Activity
14
Strong Q114 Elicits Modest GDP Upgrade
14
table: Economic Activity
14
Fiscal Policy
15
2014 Budget Bolsters PAP's Productivity Campaign
15
table: Fiscal Policy
16
Monetary Policy
17
Increasingly Prevalent Downside Risks To Inflation Forecast
17
table: Monetary Policy
17
Balance Of Payments
18
SGD: Neutral Outlook Still In Play
18
table: CURRENCY FORECAST
18
table: Current Account
19
Chapter 3: 10-Year Forecast
21
The Singaporean Economy To 2023
21
Solid Growth Trajectory To 2023
21
table: Long-Term Macroeconomic Forecasts
21
Chapter 4: Business Environment
25
SWOT Analysis
25
BMI Business Environment Risk Ratings
25
Business Environment Outlook
26
Institutions
26
Tab le: BMI Busi ness And Operatio n Risk Rati ngs
26
Tab le: BMI Lega l Fram ewo rk Rati ng
27
Table: Labour Force Quality
28
Infrastructure
29
TABLE: ASIA - ANNUAL FDI INFLOWS
29
Table: Trade And Investment Ratings
30
Market Orientation
31
Operational Risk
32
Chapter 5: Key Sectors
35
Defence
35
table: Defence Expenditure, 2010-2017
36
tab le: Air Freight , 2011-2018
40
tab le: Maritim e Freight -Port Of Singapo re Throughput , 2011-2018 ('000 to nnes)
41
Other Key Sectors
43
tab le: Oil and Gas Secto r Key Indicato rs
43
tab le: Pha rma Secto r Key Indicato rs
43
tab le: Autos Secto r Key Indicato rs
43
tab le: Telecoms Secto r Key Indicato rs
44
tab le: Infrast ructu re Secto r Key Indicato rs
44
tab le: Food and Drink Secto r Key Indicato rs
44
Chapter 6: BMI Global Assumptions
45
Global Outlook
45
Growth Increasingly Polarised
45
Table: Global Assumptions
45
Tab le: Develop ed Stat es, Real GDP Growt H, %
46
Tab le: BMI VER SUS BLOOMBER G CONSEN SUS RE AL GDP GROWTH FORE CASTS, %
46
Tab le: Em ergi ng Markets , Real GDP Growth , %
47

The Singapore Business Forecast Report helps businesses with market assessment, strategic planning and decision making to promote growth and profitability in Singapore and is an essential tool for CEOs, Chairmen, Finance Directors/CFOs, Managing Directors, Marketing/Sales Directors with commercial interests in this emerging market.

An influential new analysis of Singapore's economic, political and financial prospects through end-2018, just published by award-winning forecasters, Business Monitor International (BMI).

Key Uses

  • Forecast the pace and stability of Singapore's economic and industry growth through end-2018.
  • Identify and evaluate adverse political and economic trends, to facilitate risk mitigation.
  • Assess the critical shortcomings of the business environment that pose hidden barriers and costs to corporate profitability.
  • Contextualise Singapore's country risks against regional peers using BMI's country comparative Risk Rankings system.
  • Evaluate external threats to doing business in Singapore, including currency volatility, the commodity price boom and protectionist policies.

The Singapore Business Forecast Report by Business Monitor International (BMI) includes four major sections: Economic Outlook, Political Outlook, Business Environment and Key Sector Outlook.

Economic Outlook:

How will the Singapore economic policy-making and performance impact on corporate profitability over 2014-2018?

BMI provides our fully independent 5-year forecasts for Singapore through end-2018 for more than 50 economic and key industry indicators. We evaluate growth, and also forecast the impact of economic management.

Economic Outlook Contents

The Singapore Business Forecast Report features BMI's forecasts with supporting analysis for 2014 through to end-2018, set against government views and BMI's evaluation of global and regional prospects.

Key Areas Covered:

Data:

  • Full 10-year forecasts with data - for key macroeconomic variables including GDP (real growth and per capita), population, inflation, current account balance and the exchange rate.
  • BMI's comprehensive Risk Rankings system - rates each country worldwide for economic and political risk, and rates the business environment, within a global and regional context.

Written Analysis:

  • Economic Activity - real GDP growth, employment, inflation, consumption (retail sales and confidence).
  • Balance of Payments - trade and investment, current and capital account.
  • Monetary Policy - interest rate trends (bank lending and deposit rates) and inflation (producer price and consumer price).
  • Exchange Rate Policy - currency controls, foreign investment flows, exchange rates and foreign exchange reserves.
  • Fiscal Policy - macroeconomic strategy and policies, government finance and tax reforms.
  • Foreign Direct Investment - approvals, inflows and climate.
  • External Debt - debt profile (short and long-term plus public and private sector exposure).
  • Global Assumptions - forecasts for each year to end-2018 covering: major commodities, growth in key regions, inflation, and interest and exchange rates, in the United States, Japan, China and the eurozone.

Key Benefits

  • Rely upon BMI's 100% independent forecast scenarios for Singapore and underlying assumptions - we take no advertising and are privately-owned.
  • Exploit the benefits of BMI's comprehensive and reliable macroeconomic database on Singapore, sourced and fully maintained by BMI from an extensive network of private sector, government and multilateral contacts.
  • Gain key insights into the current and future direction of government economic policy, which could significantly affect your company's business prospects, from BMI's team of analysts and economists.

Political Outlook:

What are the political risks to doing business in Singapore over the next 5-years?

BMI's Singapore country Risk Rankings evaluate the short- and medium-term threats to political stability.

Political Outlook Contents

  • SWOT Analysis for the Singapore Market - Political Strengths, Weaknesses, Opportunities and Threats facing Singapore.
  • Political Stability and Risk Assessment - BMI's Risk Rankings assess explicit short- and long-term risks to political stability; latest ankings, rankings and trends for Singapore's risk are compared with regional and global averages.
  • Current Administration and Policy-making BMI assesses the threats to the continuity of economic policy, and likely changes to the business operating environment.

Key Benefits

  • Benchmark Singapore's risk profile against its neighbours, the global and regional average, allowing easy comparison of risks between key business markets.
  • Identify, evaluate and anticipate political and security risks to the business environment, and to your company's current operations and future plans.
  • Gain valuable insights into government and policy-making, through BMI's specialist team of analysts and economists, and their network of private and public sector sources.

Business Environment

Business Environment Risk Rankings with SWOT Analysis - Business Environment Risk Rankings for Singapore, benchmarked against rankings for regional neighbours.

Country Competitiveness - Competitiveness of Singapore's business operating environment in supporting corporate growth and profitability, compared with regional neighbours.

Business Environment Contents

  • Domestic Environment - Transparency, cronyism and corruption; labour market flexibility; corporate tax burden; interest rate levels; sophistication of banking sector and stock market; levels of business confidence; infrastructure and IT.
  • Foreign Direct Investment - Analysis of foreign investment regime; foreign ownership laws; attractiveness of business environment to foreign investors.
  • Foreign Trade - Analysis of trading environment, government trade policy, liberalisation measures, tariffs and membership of trade areas.

Key Benefits

  • Assess your company's evolving exposure to country specific operational and business risks, using BMI's in-depth analysis of the legal and regulatory business environment.
  • Understand your market's comparative strengths and weaknesses in the key areas of commercial infrastructure and business institutions, using BMI's proprietary global Business Environment Risk Rankings.

Key Sector Outlook

Which industry sectors in Singapore will grow fastest, and where are the major investment opportunities in the market?

BMI's identifies investment opportunities in Singapore's high growth industries including automotives, defence & security, food & drink, freight transport, infrastructure, oil & gas, pharmaceuticals & healthcare and telecommunications & IT.

Key Areas Covered:

  • Market Overview - Size and value of each industry with developments over 2009-2013, covering major industry key performance indicators (KPIs) that have impacted company performance.
  • 5-year Industry Forecasts - Forecasts for each year over 2014-2018, using BMI's proprietary industry modeling technique, which incorporates all key domestic and international indicators - including economic growth, interest rates, exchange rate outlook, commodity prices and demographic trends - to provide fully integrated forecasts across, and within, each industry.
  • Demand- and Supply-Side Data/Forecasts - BMI's industry data covers both the output of each industry and the domestic demand, offering clear analysis of anticipated import/export trends, as well as capacity growth within each industry.

Key Benefits

  • Target strategic opportunities in high growth industries, which are benefiting from global mega trends, and thus offer strong investment and growth opportunities.
  • Compare the growth path of different industries to identify which are best placed to benefit from domestic and international economic prospects, and which have historically suffered from volatile growth trends - a key indicator of future risks.

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Testimonials

The sections that I find most interesting and useful are the macroeconomic data and forecasts for the country, top export destinations and economic activity. The indicators/analysis of these areas helps us orient our thinking, our assumptions and, consequently, our decisions in the commercial area.

Country Manager, DHL Express