On the usual measures of economic prosperity, Singapore went from strength to macroeconomic strength in 2014. Real economic growth was between 2.5 and 3.5 per cent for the year. The world economy was forecast by the IMF in October to have grown at 3.3 per cent. Singapore continued to grow in importance as an ASEAN hub for RMB-denominated financial services, and was named, for the ninth yearrunning, the best global location for business and enterprise.
Inflation ran at between 1 to 1.5 per cent, with real income growing purportedly at 0.4 per cent. Unemployment stayed low at 2 per cent. Income inequality amongst those with a job was slightly lower — with a Gini coefficient at 0.463 before government taxes and transfers, and 0.412 after — than the year before.
But these healthy numbers need to be interpreted with caution.
For example, inflation has been low because healthcare costs have been kept low, thanks to a 2014 government subsidy for the elderly, and cannot be attributed to improvements inproductivity and economic performance. Income inequality is also likely to be understated, since retirees, who form over 6 per cent of households, and capital income, which accrues largely to higher income groups, are excluded from the calculations. As wages consistently comprise less than half of household income, measured inequality would be much higher if both retiree households and capital income are included.
*Read the rest of the article at: www.eastasiaforum.org/2015/01/10/tentative-moves-in-singapore-but-fundamental-changes-remain-absent