Government's Assumptions Underlying Assessment of Singapore's 2%-3% GDP Growth Potential

Mr Chua Kheng Wee Louis asked the Deputy Prime Minister and Minister for Trade and Industry what are the assumptions underlying the Ministry's assessment of (i) the 2%-3% GDP growth potential of Singapore (ii) the target long run growth rate of Singapore and (iii) the key drivers for bringing this growth to 3% to 5% and above.

Over the next decade, Singapore's real gross domestic product (GDP) is expected to grow by an average of 2% to 3% per annum, supported by productivity growth of around 1% to 2% per annum, even as our workforce growth slows to around 1% per annum due to an ageing population and falling birthrates.

While this GDP growth rate is comparable to that of many small, open economies, such as Switzerland, the Ministry of Trade and Industry aims to take advantage of the window of opportunities presented by structural shifts in the global economy to achieve a faster pace of growth over the next few years. Doing so will put our economy on a strong footing to stay globally competitive over the longer term.

To this end, the Economic Strategy Review (ESR), which we set up earlier this year, will seek to refresh our economic blueprint for the new global landscape. As part of this review, the Government will look into anchoring and growing higher value-added industries in Singapore, as well as leveraging technology, such as artificial intelligence, to achieve a larger productivity boost.

If we succeed in our efforts, Singapore may be able to achieve above-trend GDP growth of 3% to 4% per annum over the next few years and maybe more in very good years. In turn, this will support good real wage growth for Singaporeans and enhance our resilience in the face of global uncertainties.