I REVIEW OF THE ECONOMY ECONOMIC PERFORMANCE IN 1995

Mr Speaker, Sir, the Singapore economy had another good year. Overall growth was 8.9%, with strong showing in manufacturing, transport & communications and commerce. This reflected the strength of the global electronics cycle and buoyant regional growth. For the period 1990-95, Singapore_s economic growth averaged 8.5% per annum, better than the other Asian Newly Industrialised Economies and about the same as Malaysia and Thailand.

The strong growth performance has led to continued cost pressures. The Unit Labour Cost (ULC) Index for the manufacturing sector rose by 0.9% in 1995. Our relative competitiveness in manufacturing worsened in 1995. The Relative Unit Labour Cost Index in US$ against the NIEs grew by 9.1%. This was due to the appreciation of the Singapore dollar and larger increases in ULC against Hong Kong and Taiwan.

However, consumer price inflation moderated because of the strong Singapore dollar, weaker sentiments in the property and stock markets, and keen competition in the retail industry.

The external economy continued to grow in tandem with the domestic economy. Factor income from abroad accounted for 12% of GNP, compared with 11% for 1994 [Defined as foreign income from abroad (FIFA) as a percentage of the sum of GDP and FIA.]

The good economic performance has meant real progress for our citizens. In the last ten years, per capita income increased by 5.9% per annum in real terms. Real wages rose by 3.8% per annum. In 1995, 90% of our households owned their own homes, up from the 73% in 1985. Singapore has also made good progress in a wide range of socio-economic indicators (Table 1 (Cols. 807 - 808)). Table 1 - SOCIO-ECONOMIC INDICATORS (Cols. 807 - 808)

Strong economic growth and sound public finances have enabled the Government to enhance the assets of citizens, by upgrading HDB flats, and selling at a discount Singapore Telecom shares, HDB shops and hawker stalls.