1. of 2017, far exceeding the growth of

1. INTRODUCTIONSingapore is a developed country in Asia. It has no natural resource so most of its goods and services are imported from neighbouring countries. However, Singapore’s economy is still growing at a steady pace, showing good economic prospects. Through this report we will analyse and discuss Singapore’s GDP, inflation and unemployment as well as use the different macroeconomic theories and models to assess the economy. 2. GROSS DOMESTIC PRODUCT (GDP)A nation’s economic performance is represented by the Gross Domestic Product (GDP). The GDP measures what a nation produces during a particular time period in monetary terms.In overall, Singapore’s GDP has grown 5.2% in quarter 3 of 2017, far exceeding the growth of 1.2% in quarter 3 of 2016. It has also exceeded the expected GDP growth of 2.9%. In the third quarter, Singapore’s manufacturing sector increased by 18.4%. This has increased by a significant amount of 10% from the second quarter. Every manufacturing sector showed growths, apart from transport engineering, where there was a decrease in production. In the third quarter, Singapore’s services sector increased by 3.2%, dropping slightly by 0.2% as compared to the second quarter. The finance and insurance sector boasted the largest growth due to several reasons such as the expansions in insurance and etc. However, the accommodation & food services sector continued to face a contraction in their growth. On the downside, Singapore’s construction sector shrank by 7.6%. This was caused by weaknesses in all aspects of construction activities.Manufacturing The total production in the electronics sub-sector took up a huge 13% out of the total manufacturing percentage of 18.4%. With many countries investing in the technology markets such as driverless cars, the global sales of semiconductors rose from 1.1% in 2016 to 20.6% in 2017. With the increasing global demand for semiconductors, Singapore, which is one of the largest producers of semiconductors, will continue to experience a growth in this sub-sector. Also, the computer peripherals sub-sector has also contributed to the growth due to an increased demand for printing products. The transport engineering cluster marked a -0.2%. This was due to a decline in output in the marine and offshore engineering sub-sector of rig-building, shipbuilding and repair activities. This was due to the lingering effect of the oil price crash in 2014 where crude prices dropped by around 40%.Construction During the third quarter, the overall construction work for public and private works fell. This was due to the decline in the number of nominal certified progress payments (a proxy for construction output) and a decrease in the number of contracts awarded to individual construction companies to carry out work. Most importantly, Singapore is trying to cut down on the amount of foreign manpower involved in the construction sub-sector. There have been plans to cut down the amount of foreign manpower by 20% to 30% by 2020. With lesser foreign manpower available, more construction jobs will be left empty and subsequently, the construction sub-sector will continue to face a decline in their output.Services The finance & insurance sub-sector experienced a growth of 5.9% in the third quarter. The growth of the sub-sector was a result of financial intermediation growths. Asian Currency Unit (ACU) non-bank lending expanded by 11% while Domestic Banking Unit (DBU) non-bank lending, with increments in loans, expanded by 6.2%. There has been a constant low interest rate and hence, more investors are borrowing money to make their investments.On the other hand, the insurance sub-sector has experienced a consistent growth which is supported by life and general insurance. The increase in the growth may be due to the fact that doctors are all required to purchase insurance now. These insurances cover for the surgeries, personal healths and etc. With this new implementation of rules, doctors who currently do not have such insurances will have to purchase them, hence spurring the growth. Besides, with several major currencies being traded, there has also been an expansion in the average daily forex turnover. The accommodation & food services sector faced a decline of 2.1% in the third quarter.Despite the growth in visitors arrivals, the accommodation sub-sector faced a decline. The main reason for the fall is luxury hotels. Luxury hotels, which has a higher booking fee, contribute to a relatively larger sum of revenue. However, with the rooms in such hotels being taken off the market due to maintenance and renovation works, the average occupancy rates of luxury hotels fell by 1.8%. Also, tourists nowadays tend to go for budget accommodation such as Airbnb and capsule hotel. In the food industry, the sales volume remained relatively stagnant with the sales declining 0.1% in the third quarter. The poor performance was mostly due to the lacklustre performance of restaurants which had a 3.4% decrease in sales volume while the sales volume of other eating places grew by 1.2%. This offsets the declining sales volume of restaurants. With prices of non-cooked food increasing, restaurants are more likely to increase the prices of their goods and services to cover their cost. With that, people are less likely to dine at a restaurant due to the rise in prices and opt for a cheaper alternative.How Keynesian model in action helped to increase Singapore’s GDP From the article, one of the largest component in Singapore’s aggregate expenditure, exports, significantly increased due to China’s (one of Singapore’s key market) booming economy in the 21st century that increased its (China’s) overall consumption. This increase in net exports thus increasing the overall GDP for Singapore using the expenditure approach to calculate GDP. 3. BUSINESS CYCLEA business cycle has 4 different stages in an economy which represents the ups and downs of the country’s gross domestic product (GDP) growth trend. The 4 different stages consists of a peak, recession, trough and expansion. Although the GDP had a huge increase in the year 2017 as compared to the year 2016 based on the year-on-year measurement, however within the year 2017 itself we can witness a business cycle. At the start of 2017 (Q1), the GDP was at a an expansion/recovery at 2.9 from the previous trough of 1.2. However as it entered Q2 the GDP growth rate fell to a 2.5( contraction/recession) before it rose back to 3 at Q3 (expansion/recovery) due to the slight rise in unemployment and slight dip in business profits and productivity utilization . And finally for Q4 the GDP growth rose to the highest for the previous years at 5.4, which was higher than predicted after rising during a recovery. At this point the economy is at its peak and this is due to the country being closer to full employment and business profits as well as production utilization increasing more than the previous years. 4. UNEMPLOYMENTThe unemployment rate tells us the proportion of the labour force who have not found jobs yet, even though they are willing and able to work and are actively looking for jobs. It is the non-availability of jobs for people who are willing and able to work at the prevailing wage rate. In 2017 quarter 3, there has been lower unemployment rates with fewer retrenchments evident by the 2.1% unemployment rate in September 2017 down from 2.2% in June 2017. This could be due to less people being laid off in the growing manufacturing industry as Singapore GDP has grown 5.2% in quarter 3 of 2017 which will lead to more jobs being available due to growth in different industries which will in turn cause more workers to be hired by companies. There has also been job opportunities in sectors such as finance and insurance, healthcare and professional services to spur employment rates.  The unemployment figure of 2.1% of September 2017 in quarter 3 could be due to either structural or frictional unemployment. Structural unemployment is caused by a mismatch of the skills of workers out of work and the skills required for existing job opportunities while frictional unemployment is caused by the normal search time required by workers with marketable skills who are changing jobs, initially entering the labour force or reentering the labour force. The Ministry of Manpower also stated that the unemployment rate would be difficult to reduce in the future due to economic restructuring and mismatch between jobs available and worker’s skills. Seasonal unemployment would not be significant as Singapore would not be affected by weather-dependant jobs caused by the different seasons. However, small amounts of seasonal unemployment will still be present caused by festive seasons, for example, lion dance performers. There would be no cyclical unemployment in quarter 3 of 2017 as Singapore experienced a positive GDP growth rate of 5.2%, thus there is no recession and no cyclical unemployment. Throughout 2017, Singapore had a 12% quarter-on-quarter increase in total jobs available and a remarkable 30% increase in job seekers. This could be due to a change in government policies like employment incentives and improving employability with websites like myskillsfuture.sg that encourage more people to come into the labour force as well as an overall increase in the amount of jobs available in terms of job creation by the government.5. INFLATIONInflation is a sustained and continuous increase in the general level of prices of goods in the economy. The inflation in Singapore is very minimal despite an economic improvement as seen in her GDP growth. This means that the increase in price levels are very little and living expenses are stable. An improvement in the economy means that there will be a higher living standard for the citizens. If it is present, inflation should present because a better living standard will mean higher cost of living. However, the small increase in the general level prices of goods shows that Singapore is not severely affected by the overall economic improvement.The CPI index increased by 0.4% in October as compared to the same month last year. (ELABORATIONS?)The food inflation increased by 1.5%, while healthcare costs went up by 2.2%.The food inflation is due to the increase in the prices of non-cooked food. Higher prices of non-cooked food mean that the ingredients of proper food are more expensive. Ingredients like non-cooked food are involved in the preparation of proper food. Thus, increase in prices of ingredients are considered increase in costs of production, which would lead to increase in the prices of food. This is known as cost-push inflation, where inflation is caused by the cost of production.The reason behind the increase in healthcare costs is because of the aging population. Due to the aging population, there are more elderly in Singapore. As people age, their health deteriorates and they require more medical attention. This will definitely lead to an increase in the demand for healthcare, which will thus lead to the inflation of prices in the healthcare industry.http://www.straitstimes.com/singapore/health/public-sector-doctors-moving-to-new-insurer-move-may-push-up-indemnity-insuranceThe increase in education costs might be caused by Singapore’s well-known education system. could be because Singapore is very well known for its education system. Over the years there are many students who are attracted and decided to study in Singapore. This  result in the increase in demand and thus an increase in education costs. As for the tuition fees increase, it could be due to more parents sending their children to tuition as they are afraid that they cannot catch up in school.  Research has shown that 7 in 10 parents send their kids to tuition. The reasons for that is because they hope to improve their grades and help them to keep up with the competitive education system and to ensure that their kids are able to succeed in the future. The highest inflation rate in 2017 was in May, where the inflation rate increased from 0.4% in April to 1.4% in May. This was due to the disbursement of service and conservancy charges (S) rebates.The rebates used to be disbursed in May, but they pushed it forward to April in 2017. As a result of the change, housing maintenance and repairs were higher than a year ago. People will have more disposable income to be spent on housing in that month since they have received their imbursement. Demand for housing maintenance and repairs increases which led to increase in the price. Therefore, the inflation rate rose to 1.5% in May 2017.Core inflation excludes the cost of private road transport and accommodation from the overall CPI basket so as to reflect the impact of inflation on an individual. This is considered as a more accurate calculation of inflation because not everyone in Singapore owns a vehicle and not all Singaporeans need to rent a house. Thus, this will be more accurate as it is only calculating the living expenses of an individual based on what the individual will normally spend on. According to the MAS’ core Inflation, the rate was higher at 1.5% in September 2017, compared to 1.4% in August 2017. This was due to an increase in telco services fees. As services are included in our everyday life, services inflation would impact of our lives. When we use mobile data or wifi, we are using services provided by the telco. On average, most of the households will require this service. An increase in the telco service fees will impact most people’s expenses. ( mention cost push inflation??)6. CONCLUSIONIn conclusion, although Singapore is considered a stable economy, the different variables  are still subjected to economic fluctuations. This is shown from Singapore’s GDP, where there was significant growth in just a quarter (from Q2 to Q3). Additionally, the inflation is also changing many times within a year which can be shown from the above analysis as well. From the report we also can see how most of the economic variables are related to one another, which means that a change in one variable will affect the other. This is particularly evident in terms of unemployment where the availability of jobs will be highly dependent on the GDP growth rate. However, from the articles and analysis we can conclude that the Singapore economy is improving and can even be considered as being at its peak.This is due to Singapore having a huge growth in the GDP and a slight drop in the unemployment rate, also the inflation rate is rather stagnant in spite of the economic growth.