Business Monitor International

Singapore Business Forecast Report

Published 19 November 2014 | Quarterly

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

Core Views 

  • Singapore's ongoing restructuring drive continues, with the ruling People's Action Party (PAP) pushing ahead with stricter foreign labour rules despite an increasingly tight labour market. While we believe that the tight labour market is acting as a headwind against economic growth, we do not foresee any easing from the government in the near future.

  • Singapore's real GDP growth accelerated slightly to 2.4% y-o-y in Q314 , but this remains below the government's forecasted range of 2.5-3.5% for 2014.   We retain our below consensus real GDP growth forecast of 2.5% for 2014, and note that risks to our 3.3% growth forecast for 2015 are likely to the downside given domestic and external pressures.

Key Forecast Changes

  • We have adjusted our 2015 Singapore dollar average forecast down to SGD1.2500/USD from SGD1.2300/USD previously as the currency continues to experience headwinds from a strong US dollar as well as weakening currencies among its regional trading peers.

Key Risks To Outlook 

  • A faster than expected recovery in the US economy could lead the US Federal Reserve to hike interest rates earlier than forecasted. This would have negative ramifications for the already weak Singapore property market, and could lead to a more acute price correction than we are currently forecasting.

Macroeconomic Forecasts (Singapore 2012-2015)
Indicator 2012 2013 2014f 2015f
Nominal GDP, USDbn 290.8 293.0 307.2 336.9
Real GDP growth, % y-o-y 1.9 4.1 2.5 3.3
Consumer price inflation, % y-o-y, eop 3.7 2.3 3.3 2.5
Exchange rate SGD/USD, eop 1.22 1.26 1.27 1.23
Budget balance, % of GDP 1.2 1.1 0.9 0.8
Current account balance, % of GDP 16.4 16.0 16.2 16.0
National Sources/BMI

Click here to explore data

Table of Contents

Executive Summary
Core Views
Major Forecast Changes
Key Risks To Outlook
Chapter 1: Political Outlook
SWOT Analysis
BMI Political Risk Index
Domestic Politics
Competitiveness, Global Weakness To Hit Export Outlook
Table: Political Overview
Long-Term Political Outlook
Political Liberalisation Likely To Be Slow Over Next Decade
Chapter 2: Economic Outlook
SWOT Analysis
BMI Economic Risk Index
Economic Activity
MAS Stands Pat As GDP Disappoints
Table: Economic Activity
Fiscal Policy
Long-Term Fiscal Outlook Strong Despite Headwinds
Table: Fiscal Policy
Monetary Policy
AEC: Financial Services Liberalisation To Benefit Singapore
Table: Monetary Policy
Exchange Rate Policy
Weaker Peer Currencies A Drag On SGD
Table: Current Account
Chapter 3:10-Year Forecast
The Singaporean Economy To 2023
Solid Growth Trajectory To 2023
Table: Long-Term Macroeconomic Forecasts
Chapter 4: Operational Risk
Operational Risk Index
Operational Risk
Table: Operational Risk
Transport Network
Table: Asia Transport Network Risks
Economic Openness
Table: Economic Openness
Table: Top 5 Trade Partners Product Exports (USDmn)
Table: Top 5 Products Imported (USDmn)
Chapter 5: Key Sectors
Table: Construction & Infrastructure Industry Data
Table: Construction & Infrastructure Industry Data
Table: Factbox - Key Milestones In Singapore's Infrastructure Masterplan
Oil & Gas
Other Key Sectors
Table: Pharma Sector Key Indicators
Table: Telecoms Sector Key Indicators
Table: Defence and Security Sector Key Indicators
Table: Food & Drink Sector Key Indicators
Table: Autos Sector Key Indicators
Table: Freight Key Indicators
Chapter 6: BMI Global Assumptions
Global Outlook
Reality Check: Uncertainty Reigns
Table: Global Assumptions
Table: Developed States, Real GDP GrowtH, %
Table: Emerging Markets, Real GDP Growth, %

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:


  • 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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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