QUESTION 1

(a)State how the following transactions would be recorded in Singapore's' Balance of payments. In your answer state the item, the relevant account, and whether it is a credit or a debit entry.

(i)A Singaporean resident purchases a dairy farm in New Zealand

(ii)A UK resident visits their relatives in Singapore and spends SGD 600 shopping on Orchard road.

(iii)An Australian resident purchases a factory in Malaysia from a Singaporean resident

(iv) A Singaporean company pays dividends to its Australian shareholders

(v)An Australian resident receives income for services rendered in Singapore

(b) Review the table below:- unit Data SSm Previous period Balance of Payments S$m 3,530.80 4,141.10 Current Account Balance S$m 19,600.60 24,194.50 Exports of Goods and Services S$m 224,918.40 220,269.20 Imports of Goods and Services S$m 191,669.00 183,147.20 Primary Income Balance S$m -11,611.60 -10,716.50 Secondary Income Balance S$m -2,037.20 -2,211.00 Reserve Assets SSm 3,530.80 4,141.10 Official Foreign Reserves US$m 282,995.20 278,625.10 Net International Investment Position S$m 1,207,120.5 Provide an economic assessment of the data presented. In your answer refer to the economic significance of the various accounts in the balance of payments, the role of the central bank, international net debt, changes in foreign investment and changes in trade flows, savings and investment differentials