Tuesday, January 20, 2009

Confusing Statistics about Singapore in 2009

Afternote: They revised the GDP growth forecast downwards and some views in this post is not valid anymore.

I'm confused by the official statistics. The news said that Singapore would experience between -2 percent and plus 1 percent for 2009. Then the news from Channel Newsasia website also said that Singapore's population is expected to fall by as much as 4% as foreign workers get laid off in 2009.

Since GDP per capita is linked to both total GDP and also population, does that mean that while total GDP drops, the actual GDP per capita would increase, since the base, i.e. population in Singapore, is shrinking?

Moreover, since the foreign workers are 'working' with actual income received while there are actually Singaporeans who are not working, e.g. 70 years old grandmothers, does that also means that actual productivity per working adult should also be increasing due to the much smaller denominator?

Ok ok I may be generalising here, but the concept seems confusing somehow. If dropping population numbers far outstrip the negative growth, surely GDP per capita must be increasing. Hmm so maybe our average household income next year would also increase, and the latest 2008 figures for household incomes have already been affected by this 'population drops faster than GDP shrinkage' phenomenon. Quoting from Straits Times:
Latest official figures show the average monthly income for all Singapore households went up by about $700 in a year, from $6,300 in 2007 to $7,090 last year.
and also from Channelnewsasia:
The median monthly household income among all resident households grew 13 per cent from S$4,380 in 2007 to S$4,950 in 2008.
Food for thought isn't it?

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