1.1 Economic Performance in 2006
The Singapore economy registered a strong performance in 2006. Real Gross Domestic
Product (GDP) expanded by 7.9%, higher than the 4% to 6% growth projected when the
Budget for Financial Year (FY) 2006 was set out in February 2006. With the major
economies continuing to expand and the Asian countries registering strong growth,
Singapore was well positioned to ride on the global growth momentum.
Activity in the manufacturing sector remained strong, led by the transport engineering,
biomedical manufacturing, and precision engineering clusters. Among the service industries,
wholesale and retail, financial, and business services recorded impressive gains. The labour
market continued to improve, with 173,300 new jobs created, up from 113,300 in 2005. The
unemployment rate was down to 2.7% for 2006. Inflation remained subdued, with the
increase in the Consumer Price Index (CPI) hovering around 1.0%.