PART I ECONOMIC PERFORMANCE IN 1993

Mr. Speaker, Sir, the Singapore economy grew by 9.9% in 1993. Growth was broad-based, with all major sectors doing well though overall growth was also boosted by the strong performance of the financial and business services sector, in particular the stock market.

We were able to achieve good growth despite sluggish growth in most of the developed countries because the Singapore economy benefited from strong regional growth and good prospects in certain product niches like electronics.

The manufacturing sector expanded by 9.8% on the back of strong demand for electronic products like disk drives, telecommunications equipment, semiconductors and printed circuit boards from the USA, Europe and the booming Asia-Pacific region.

The financial and business services sector saw its growth rate more than double from the 5.3% in 1992 to 13% in 1993. The faster growth was due to buoyant activity in the stock market and foreign exchange trading, faster growth in domestic lending and a modest recovery in the Asian Dollar Market.

Boosted by buoyant entrepot and transhipment trade, the commerce sector and the transport & communications sector also did well. The commerce sector grew by 8.5% and transport & communications grew by 9.6%. Construction activity remained buoyant with growth of 8.0% due to the strong pipeline of contracts awarded in 1992 and 1993.

For the first time in three years, productivity growth exceeded real wage growth. The strong productivity growth of 6.4% reflected both a cyclical recovery from the weak productivity growth in 1991 and 1992, and the upgrading of our manufacturing activities.

As a result, the Unit Labour Cost Index fell and contributed to the continued decline in the Unit Business Cost Index. Against the other Newly Industrialising Economies, Singapore's competitive position also held steady. One sign of our continued attractiveness to investors is the record $3.9 billion worth of investment commitments in the manufacturing sector which we received, in a year when investor countries cut back on outward investment or diverted investments to China and Vietnam.