The Singapore economy performed well in 2005. Real Gross Domestic Product (GDP)
expanded by 6.4%, higher than the 3-5% growth projected when the Budget for Financial
Year (FY) 2005 was set out in February 2005. Global economic activity remained resilient
despite the headwinds of high oil prices. Activity in the manufacturing sector was particularly
strong, reflecting an unexpected boost to pharmaceutical output, while growth in electronics
output was sustained on the back of a cyclical improvement in the global semiconductor
industry. Trade-related services industries also recorded impressive gains, buoyed by strong
intra-regional trade.
The labour market continued to improve, with 110,800 new jobs created. The unemployment
rate was down to 2.5% by the end of 2005. Inflationary pressures remained subdued, with
Consumer Price Index (CPI) inflation averaging 0.5%.