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Despite a turbulent 1998 for global finance, Singapore still posted a modest growth of 0.3%. Such resilience is due to the city-state's healthy economic fundamentals, sound government policies and a liberalized financial services sector.
Since the early 1990s, the twin engines of growth for the Singapore economy have been financial & business services and manufacturing, accounting for 27.5% and 24.9% of GDP respectively. Another major contributor is the commerce sector with an average share of 19.7% of GDP. Services for traders using Singapore as a regional distribution centre are dominant. Singapore is dependent on the external world due to its small domestic market and some two-thirds of total demand comes from outside the Republic. Total trade averages nearly 2.8 times its GDP.
Growth prospects
Amid an improved regional economic environment, domestic demand should pick-up due to government spending on infrastructure projects, plus higher private consumption expenditure. Stabilizing unemployment figures - 3.3% in the second quarter of 1999 - as well as the recovery of...