MACRO ECONOMICS CASE ANALYSIS

DECISIONS FACING THE MONETARY AUTHORITY OF SINGAPORE

SECTION–A | LEARNING TEAM–1

• DARSHAK JAGADESH

• DIANNE SISON

• MADHURANATH R

• SHAKUL DUBE

• TANMOY DEY

• VINCENT BERMEJO

ASIAN INSTITUTE OF MANAGEMENT

Cohort-7 | MBA 2012

| QUESTION |

In a changing Asian economic scenario, how can Singapore sustain high growth measures despite its inherent unique challenges and limitations?

| IMPACT | UNIQUE LIMITATIONS OF SINGAPORE ECONOMY

C – CONSUMPTION CAP

Domestic consumption in Singapore does not provide sufficient leverage in manipulating GDP for a long term

I – INVESTMENT THRESHOLD

Being a developed economy, Singapore has limited handle on boosting GDP through domestic investments

G – GOVT. SPENDING ON WHAT?

A small country like Singapore, which is already developed, has limited need for government spending

X – EX-IM MIX

Financial services are the chief component of Ex-Im mix which greatly enhances the impact of only specific fiscal or monetary policies on Singapore’s GDP growth rate

| RESPONSE | RECOMMENDATIONS FOR SINGAPORE ECONOMY / MAS

Continue the exchange rate control policy

Use alternate fiscal/monetary policy tools in line with the economic changes

Explore innovative fiscal and monetary policy tools like GAP and tax holidays

Aid in holistic growth of Asia as a region to sustain Singapore’s own economic growth

THANK YOU