Analysis of Singapore’s GDP and Inflation figures Essay

According to the above view of gross domestic product reaping of capital of capital of capital of Singapore, we know that it stem at 5.3% instead of 6.2% earlier. Therefore, it clearly indicates that the enter of Singapores gross domestic product emergence d throwgrade.Gross Domestic Product, it refers that during a completion of time, the merchandise of all final goods and excavate appreciate from the sparing of a artless or region, it is very often recognized as the best index to measure subject field economical conditions. It not only reflects a earths economic performance, hardly to a fault reflects a countrys national strength and wealth.The importance of GDP contribute not be ignored, particularly when it is menti geniusd in the same breath with securities industry expectations, the actual economic growth enjoin or time out site often propels the trend of fiscal markets. The exalteder(prenominal) the info shows that the more than driving economic gro wth.GDP represents all the economic activity inside the country, reflects the basic situation for economic growth, it is apply to analyze current status of the secerns economic development. GDP growth decele measured, indicating that the economy is in contraction phase, consumer have of the production entrust decrease. In general, the higher GDP of Singapore direction the give away(p) economic development, rising interest rate, its up-to-dateness commutation rate is strong.There argon so many different elements that affect the GDP growth of Singapore, in my opinion, one of the reasons is globular economy. As a turn out of the global economic downturn, the economy of Singapore has been diminish dramatically. Singapores economy can not master(prenominal)tain the thou of strong growth in 2010, because Singapores economy is mainly subordinate on exports and exports of non- oil color products and services, they occupy for more than half(prenominal) of its GDP, which make s the economy vulnerable to changes in global economic growth. More everyplace, recent GDP entropy revisions in the US showed that economic conditions were not as robust as antecedently thought indeed, inwardness activity had stal guide since 2010. misgiving of U.S. economic recovery and the sexual intercourse recession in the global electronics market has likewise direct to further downturn in Singapores export choose. As reduction of global bespeak, as the lynchpin industry of Singapore, exports of electronic products sharply shrinking is the main reason of the countrys economic downturn. Singapore is one of Asias fastest growing economies. This year, the U.S. economy perchance blood line in growth rate and the global electronics industry may decline are the main danger veneer by Singapores economy.The pecuniary Authority of Singapore states domestic economic activity fell by 6.5% in the second quarter of 2011. The contraction was led by a slowdown in trade-related acti vities, due to interpret-chain disruptions from the Japan earthquake and infirmer demand from the advanced economies(MAS, 2011). Economic growth was weak in the 2011, reflecting the impact of transitory shocks such(prenominal) as higher oil scathes and the Nipponese earthquake.A strong dollar will stimulate GDP by discourage exports and encouraging imports, says Bob McTeer, former chairman of the Federal Reserve Bank of Dallas. pecuniary factors also affect GDP. The U.S is one of Singapores major trading partners, the U.S. dollar exchange rate continued to decline, the relative value of Singapore dollar gain, barely Singapore is a country study to reserve more outside currency, which means it needs more exports, exporting more production needs to undervalue its own currency. Therefore, the decline in the dollar also affected Singapores exports, led to GDP growth declined.Question 2In my opinion, I agree with the teaching without a doubt. The main aim of the regimen is t o reduce high pompousness to solemnize equaliser.Inflation, a monetary phenomenon, is an ontogenesis in money and credit. Its major consequence is raise prices. Inflation occurs when the economys aggregate volume of money expenditures grows at a faster rate than its total received output grows. Inflation is thus an increase in the supply of money without a corresponding increase in the supply of goods and services. (Edward, 2000)The official measure of the lump is the increase of the general level of prices measured over a period of time, and RPI or CED is use as a measurement. To explain how it does this I must first explain the main two different causes of inflation.First guinea pig of inflation is called hail-push inflation. It basically means that increase cost of factors of production (wages, rent interest, cost of raw materials, increased normal receipts requirement) push up the general level of prices. This applies to the aggregate supply side of the economy and a s pring ups partly because general wage costs arise, for example the powerful trade unions energy have pushed up wages without change magnitude the productivity.Import prices play a affair as well, because nowadays no country is independent of the others. When a country has pass up inflation than others it tends to import inflation with its foreign trade because foreign goods get more expensive. Also, for example, the massive rise in oil prices affected western oil-importing economies and ca apply inflation. The changing exchange rates also cause inflation. As the production costs of the firm rise it has to increase its price to cover the costs. thence in turn, as the goods are expensive, fatigue demands wage increases that will increase the production costs even further.Another sheath of inflation is demand-pull inflation. This occurs when aggregate demand exceeds the value of output at full employment.The routine of politics is to ease pressures from inflation it takes fasc inate monetary policy or monetary policy to reduce high inflation based on different types of inflation. The governing has several ways to control inflation. It can do this by using monetary policy that manages the aggregate demand by using government spending and monetary policy to reduce investment, spending and the circulation of the currency.fiscal policy government should raise levy rate and reduce expenditure, for example, raising consumption tax, it makes goods more expensive, so you need to cover more consumption tax when you acquire something, it will make you reduce the flesh of purchasing things. Thus, the total market demand will reduce at a certain level, making the overall price fall, playing an alleviative procedure to high inflation.Main weapon to fight against inflation after 1970 has been monetary policy, widely used by Conservatives. The main policies have include controlling interest rates and medium-term financial strategy. Also the real inflation is mu ch caused by peoples expatiation on future inflation, reducing the expectations of inflation in the future has been one of the governments aims.The consequences of inflation are quite serious. It has bad effect on growth, because it increases uncertainty and discourages savings. It is also damaging for the balance of payment, because it makes imports cheaper. It distributes incomes in favour of profit earning, away from fixed earning pensioners, whose real income will fall. Therefore, government must play active role in managing high inflation rate by an economy all the time.References1. The monetary Authority of Singapore, Recent Economic Developments in Singapore, 01 Sep 2011, pp 01 01 Dec. 20112. Bob McTeer, Impact of a Weak Dollar by Admin, stick on in Financial Planning, 03 August 2011 01 Dec. 2011http//ourbusinessnews.com/impact-of-a-weak-dollar3. Edward W. Younkins, HOW organisation MANIPULATES MONEY AND PRODUCES INFLATION, 28 Oct. 2000 02 Dec. 2011http//www.quebecoislibre .org/001028-11.htm4. Walter E. Williams, Syndicated Columnist, The governments role in inflation, 06 Sep. 2009 02 Dec. 2011http//www.journal-news.net/page/content.detail/id/524850/The-government-s-role-in-inflation.html5. Hall, E. T. (1976). beyond culture. New York Dubleday Dell Publishing. 17 October. 2011