Singapore Business Forecast Report Q1 2013

Executive Summary
Core Views
Key Forecast Changes
Key Risks To Outlook

Chapter 1: Political Outlook
SWOT Analysis
BMI Political Risk Ratings
Long-Term Political Outlook
Political Liberalisation Likely To Be Slow Over Next Decade
Singapore faces very limited political risks in the near term and we expect the ruling People's Action Party to retain its monopoly on
power However, over the longer term, the city-state will come under greater pressure from its citizens to become a more vibrant
democracy and foster credible opposition parties
TABLE: POLITICAL OVERVIEW
Political Analysis
Businesses Feeling Pinch Of Tighter Immigration Policy
Although Singapore's increasingly tight foreign labour laws have placed additional pressures on employers in the city-state's already
tight labour market, we do not expect the government to backtrack on its current policy shift

Chapter 2: Economic Outlook
SWOT Analysis
BMI Economic Risk Ratings
Economic Activity
Inflation Rolls On Despite Stalled Growth
Although Singapore's economy has thus far avoided a technical recession, it is not yet out of the woods, with the threat of elevated
inflation and subdued growth once again on the radar As a result of slower than expected growth due to increasingly feeble external
demand, we have downgraded our full-year 2012 GDP growth forecast to 1 9% from 2 6%, and we note that downside risks to our
forecast for 3 6% GDP growth have increased
TABLE: ECONOMIC ACTIVITY
Fiscal Policy
Economy To Rebalance In Spite Of Government Policies
Although the Singaporean government car ries total debts equivalent to 108 3% of GDP, this figure is misleading as the entirety of the
debt is domestic and the majority of it is intragovernmental While Singapore's overall public debt level is thus not a concern, its Central
Provident Fund (CPF) program contributes to the country's extremely high s avings rate of 49 8%
TABLE: FISCAL POLICY
Monetary Policy
Inflation Spike Underscores Unique Price Pressures
Singapore inflation broke with its recent trend of moderation in September, posting at 4 7% y-o-y versus 3 9% in September on stubborn
housing and transportation costs While we retain our end-2012 inflation target of 3 7%, we have upgraded our end-2013 inflation
forecast from 1 5% to 2 5% on expectations that ongoing supply limitations in the aforementioned categories will keep prices elevated
for a more extended period
TABLE: MONETARY POLICY
Balance Of Payment
Tough Export Outlook Continues As Trade Balance Hits Inflection Point
As we expected, Singapore's export outlook declined in Q312 as muted external demand weighed on the sector, helping to drag the
economy into a sequential contraction Looking ahead, we see little reason to expect a considerable rebound before the end of the year,
and have downgraded our 2012 current account surplus forecast to SGD52 7bn (15 1% of GDP) from SGD67 7bn previously Over the
longer term, we believe that 2012-2013 may signal an inflection point for the economy, as domestic demand outperformance allows
import growth to begin to outrun export growth
TABLE: CURRENT ACCOUNT

Chapter 3: 10-Year Forecast
The Singaporean Economy To 2021
Solid Growth Trajectory To 2020
We are fairly upbeat on Singapore's longer-term growth prospects to 2022, forecasting real GDP to recover in 2013 and expand at an a
verage of 3 5% from 2013 to 2022 Key supporting factors will be the government's sound economic policy, a highly skilled workforce,
a superior business environment and financial services industry as well as the city-state's strategic location in Asia Key constraints
include the economy's reliance on the external sector and Singapore's ageing demographic profile
TABLE: LONG-TERM MACROECONOMIC FORECASTS

Chapter 4: Business Environment
SWOT Analysis
BMI Business Environment Risk Ratings
Business Environment Outlook
Institutions
TABLE: BMI BUSINESS AND OPERATION RISK RATINGS
TABLE: BMI LEGAL FRAMEWORK RATING
TABLE: LABOUR FORCE QUALITY
Infrastructure
TABLE: ASIA, ANNUAL FDI INFLOWS
TABLE: TRADE AND INVESTMENT RATINGS
Market Orientation
Operational Risk

Chapter 5: Key Sectors
Oil & Gas
TABLE: SINGAPORE OIL & GAS – HISTORICAL DATA AND FORECASTS, 2010-2016
Infrastructure
TABLE: ENERGY AND UTILITIES INFRASTRUCTURE DATA, 2011 – 2016
TABLE: SINGAPORE CONSTRUCTION AND INFRASTRUCTURE INDUSTRY DATA, 2008 – 2016
Other Key Sectors
TABLE: AUTOS SECTOR KEY INDICATORS
TABLE: PHARMA SECTOR KEY INDICATORS
TABLE: FOOD AND DRINK SECTOR KEY INDICATORS
TABLE: DEFENCE AND SECURITY SECTOR KEY INDICATORS
TABLE: TELECOMS SECTOR KEY INDICATORS
TABLE: FREIGHT SECTOR KEY INDICATORS

Chapter 6: BMI Global Assumptions
Global Outlook
Mixed Signals For The New Year
TABLE: GLOBAL ASSUMPTIONS
TABLE: DEVELOPED STATES REAL GDP GROWTH FORECAST
TABLE: REAL GDP GROWTH CONSENSUS FORECASTS
TABLE: EMERGING MARKETS REAL GDP GROWTH FORECAST 53