Singapore has a highly developed market-based economy, which has historically revolved around extended entrepôt trade, in other words an export driven economy hugely dependant on export of goods to other countries. Along with Hong Kong, South Korea and Taiwan, Singapore is one of the Four Asian Tigers. The economy depends heavily on exports and refining imported goods, especially in manufacturing. Manufacturing constituted 26% of Singapore's GDP in 2005.The manufacturing industry is well-diversified with significant electronics, petroleum refining, chemicals, mechanical engineering and biomedical sciences manufacturing sectors. In 2006, Singapore produced about 10% of the world's foundry wafer output. Singapore has one of the busiest ports in the world and is the world's fourth largest foreign exchange trading centre after London, New York City and Tokyo.
Singapore has been rated as the most business-friendly economy in the world,[46][47] with thousands of foreign expatriates working in multi-national corporations. Singapore is also considered to be one of the top centres of finance in the region and the world. In addition to this, the city-state also employs tens of thousands of foreign blue-collared workers from around the world.
As a result of a global recession and a slump in the technology sector, the country's GDP contracted 2.2% in 2001. The Economic Review Committee (ERC) was set up in December 2001, and recommended several policy changes with a view to revitalising the economy. Singapore has since recovered from the recession, largely due to improvements in the world economy; the Singaporean economy grew by 8.3% in 2004, 6.4% in 2005 and 7.9% in 2006. On 19 August 2007, Prime Minister Lee Hsien Loong announced in his National Day Rally Speech that Singapore's economy is expected to grow by at least 4-6% annually over the next 5–10 years.
The per capita GDP in 2006 was US$29,474. As of September 2007, the unemployment rate is 1.7%, which is the lowest in a decade, having improved to around pre-Asian crisis level.[5Employment continued to grow strongly as the economy maintained its rapid expansion. In the first three quarters of 2007, 171,500 new jobs were created, which is close to the figure of 176,000 for the whole of 2006. For the whole of 2007, Singapore's economy grew 7.5% and drew in a record S$16 billion (US$10.6b, €8.3b)of fixed asset investments in manufacturing and projects generating S$3 billion (US$2b, €1.6b) of total business spending in services.
Singapore introduced a Goods and Services Tax (GST) with an initial rate of 3% on 1 April 1994 substantially increasing government revenue by S$1.6 billion (US$1b, €800m) and stabilising government finances. The taxable GST was increased to 4% in 2003, to 5% in 2004, and to 7% on 1 July 2007.
Due to the economic recession, Singapore's economy expanded by only 1.1% in year 2008, much lower than the expected 4.5% to 6.5% growth, while the unemployment rate was at 2.8%. The economy is expected to contract greatly by up to 8% in 2009 and unemployment could rise to 5% this year as forecast by several private sector economists.
The Economic Development Board is a statutory board of the Government of Singapore. It has been tasked to plan and execute strategies to sustain Singapore as a leading global hub for business and investment.