We Constantly Talk About Singapore's GDP per Capita. What Does That Even Mean for Singaporeans?
The phenomenon is here once again.
Once every five years, Singapore experiences overnight growth in the number of “Economists” and “Political Analysts” which will later subside after the election date.
While it is really encouraging to have the nation being concerned about Singapore’s economy and outlook, getting stuck in a Grab ride with a driver spreading fake news can really ruin a Friday night out.
One such ride indirectly resulted in this article.
Do note that Seedly has no affiliation with any political party.
What is Gross Domestic Product (GDP)?
We cannot talk about GDP per capita without understanding what is GDP.
Gross Domestic Product (GDP) is the total monetary value of goods and services produced by the country. It is an indicator of the economic health of the country. Economists and investors often use it in their calculation to understand the total size of the economy.
Of course, if you are super into the formula for calculation GDP, here it is
Gross Domestic Product (GDP) = Consumption + Government Spending + Investments + Net Exports
What is Singapore’s GDP?
Singapore’s GDP in the year 2019 is at S$507,568 Million.
We experienced a 0.7% real GDP growth in comparison to the year 2018.
What Contributes to Singapore’s Nominal GDP?
Here’s the break down of what contributed to Singapore’s GDP in the year 2019:
|Industries||Percentage of Nominal GDP|
|Wholesale and Retail Trade||17.3%|
|Finance and Insurance||13.9%|
|Other Services Industries||11.3%|
|Transportation and Storage||6.7%|
|Information and Communications||4.3%|
|Ownership of Dwellings||3.8%|
|Accommodation and Food Services||2.1%|
Singapore’s GDP Over the Past 10 years
To give a better understanding of how Singapore did over the years, here’s a compilation of Singapore’s GDP over the past ten years:
|Year||Gross Domestic Product (GDP) at Current Market Prices|
Since the year 2010, Singapore has been experiencing stable growth in terms of GDP, indicating that the economy is in rather good health.
Now that we have an understanding of GDP, we take a look at Singapore’s GDP per Capita.
GDP per Capita was recently made famous by the Singapore General Election. We take a look at what it actually means to Singaporeans.
What Is GDP per Capita?
Gross Domestic Product per capita or GDP per capita is a measure of the country’s economic output per person. It is an indication of the economic activities going on in the country.
Gross Domestic Product (GDP) Per Capita =Gross Domestic Product (GDP) / Total Population
If a rich country has a really small population, the GDP per capita will be high.
As of the year 2019, the GDP per capita is at S$88,991.
If you are wondering where does Singapore stand in terms of GDP per capita when compared to the rest of the world, here’s a list of countries with the highest GDP per capita (Nominal):
|Rank||Country||GDP per capita (Nominal) ($)|
|15||Hong Kong SAR||49,334|
In fact, Singapore is one of the most affluent nations in ASEAN.
What Does a High GDP Per Capita Mean For a Country?
GDP per capita is often used to measure the standard of living for a nation. In theory, it is true that a country with a high GDP per capita means the ability to be able to pay the population higher wages for their contributions to the nation’s output. This will then translate to a higher standard of living for the people in the nation.
However, like any other economic indicator, GDP per capita has its flaws too.
While the GDP per capita number looks good on a country’s “report card”, we are assuming that the benefit of the country’s growth is distributed evenly among everyone in the country. This is simply, not the case.
In most cases, the rich in the country gets richer while the poor remain poor. This can result in extreme wealth inequality for a country.
Where does Singapore stand on this?
Based on statistics, wealth inequality in Singapore is not extreme when we compare that to the rest of the world.
Singapore has a rather low 14% of the population with wealth below USD 10,000.
For Singaporeans with wealth above USD 100,000, Singapore is five times more than the world average. In short, 226,000 individuals living in Singapore are the top 1% in terms of wealth when compared globally.