Strong fundamentals and policy support against an unprecedented shock

AA1

MEDIUM RISK for enterprise

  • Economic risk

  • Business environment risk

  • Political risk

  • Commercial risk

  • Financing risk

  • Economic risk

  • Business environment risk

  • Political risk

  • Commercial risk

  • Financing risk

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GDP USD339.9bn (world ranking 36, World Bank 2020)
Population 5.7mn (world ranking 114, World Bank 2020)
Form of state Parliamentary Republic
Head of government LEE Hsien Loong (PM)
Next elections by July 2025, general election
  • Stable political system and effective policymaking, including prudent macroeconomic policies
  • High-income country that serves as a regional and global hub for trade with the world’s 2nd busiest port
  • Strong external position with a track record of current account surpluses, ample foreign exchange reserves, and low public external debt
  • Strong business environment and banking sector
  • Strategic position at the heart of South-East Asia
  • High dependence on exports
  • Pressure on productive population due to high old age dependency ratio
  • Shift to a mature economy implies slower growth in the medium and long-term
  • Land scarcity as the government seeks to expand population in the long run

Trade structure by destination/origin

(% of total, 2020)

Exports Rank Imports
China 15.5%
1
14.4% China
Malaysia 11.3%
2
13.0% Malaysia
China, Hong Kong SAR 11.1%
3
11.1% United States of America
United States of America 8.5%
4
8.8% Taiwan
Indonesia 6.5%
5
5.6% Japan

Trade structure by product

(% of total, 2020)

Exports Rank Imports
Electrical machinery and apparatus 30.1%
1
25.5% Electrical machinery and apparatus
Petroleum and related materials 12.1%
2
16.2% Petroleum and related materials
Organic chemicals 4.8%
3
5.1% Gold, non-monetary (excluding gold ores and concentrates)
Office machines and automatic data processing machines 4.7%
4
4.7% Office machines and automatic data processing machines
Specialised machinery 4.5%
5
4.4% Other transport equipment
The payment behavior of domestic companies and the DSO is good. However, the law provides no guidelines as to how late payments should be handled and contracts remain the only reference when business relationships turn sour.

  • Low

  • Medium

  • Sensitive

  • High

  • Payments

  • Court proceedings

  • Insolvency proceedings

  • Payments

  • Court proceedings

  • Insolvency proceedings

Overall, legal action remains expensive even though the court system is fairly efficient.

The insolvency framework is in line with international standards however in practice, as in most countries, collecting debt from insolvent debtors would prove to be a genuine challenge.

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