Singapore’s open economy allows for engagement with foreign nations to provide an increase in capital flow. An open economy has helped Singapore grow its economy in the nation into the developed and advanced nation it is to this day (Fong, 2023). Singapore had a GDP of $466.79 billion and had a total of $82,807.60 in GDP per capita in 2022 (World Bank, 2023). The GDP per capita is the estimated amount a household makes and the average household in Singapore is thriving with an income of $82,807.60 higher than the majority of nations. In October 2023, $1 is equivalent to 1.37 Singapore dollars (Fred, 2023). The Singapore dollar is not as strong when compared to the US dollar but it is not weak as it can hold up against the US dollar and has a powerful purchasing power.
Singapore’s current economic forecast has shown the nation to focus on targeting inflation after the downturn affects the economy in 2019. Economists in Singapore would understate inflation by five percent when there was an occurrence of high inflation in 2019 (Gergum, 2022). High inflation became an issue in Singapore as economists miscalculated the rate of inflation. To combat the rise in inflation, Singapore would fix its exchange rate against a trade basket weight as a form of stabilizer to manage the exchange rate to prevent high inflation (Chow & Choy, 2023). In 2022, Singapore had an inflation rate of two point two percent (International Monetary Fund, 2023). The trade basket is helpful to combat high inflation and improve the economic effect this would have on the nations.
