Question

Items		Latest Period	Latest Data	% Change (Y-o-Y)	Previous Period Data
Balance of Payments	S$M	Q2/17	4,443.2	-6.6	16,613.8
Current Account Balance	S$M	Q2/17	21,049.5	-1.0	20,092.9
Exports of Good and Services	S$M	Q2/17	188,908.4	6.8	184,785.5
Imports of Good and Services	S$M	Q2/17	161,953.1	8.7	159,598.4
Primary Income Balance	S$M	Q2/17	-2,058.1	na	-1,496.9
Secondary Income Balance	S$M	Q2/17	-3,847.7	na	-3,597.3
Capital and Financial Account Balance (decrease in assets and liabilities, and net inflows in net balance, are indicated by a minus(-) sign	S$M	Q2/17	16,744.3	na	3,096.3
Reserve Assets	S$M	Q2/17	4,443.2	na	16,613.8
Official Foreign Reserves	US$M	Aug-17	273,114.8	8.3	269,724.1

Question 4

In the table given above, Singapore’s balance of payments (BoP) comprises:

(a) Current account of goods, services & factor income (primary & secondary income balance)

(b) Capital & Financial account as DFI & Portfolio Investment

(c) Errors & Omissions

(d) A+B+C = BoP reflected in E

(e) Reserve Assets

(f) Official reserves (stock as accumulated over the years)

Explain the balance of payments position of Singapore and why traditionally, its trade in services rather than trade in goods dominated its Current Account. Why is this not a problem in policy?

Answer 1

Singapore has a positive and favourable balance of payment position with Balance of Payment (BoP) standing at 4432 Mn Dollar. Traditionally,its trade in services dominated because trade in goods has largely been consistent while trade in services being an emerging area experienced fluctuating trend.

The dominance of trade in services is not a problem for policy makers as Singapore is a middle class led economy and so demand for skilled job is also very high and so service sector growth does not lead to any major asymmetry in job employment market.