Question

In the table given below, Singapores balance of payments (BoP) comprises:

(a) Current account of goods, services & factor income (primary & secondary income balance)

(b) Capital & Financial account as DFI & Portfolio Investment

(c) Errors & Omissions

(d) A+B+C = BoP reflected in E

(e) Reserve Assets

(f) Official reserves (stock as accumulated over the years)

Explain the balance of payments position of Singapore and why traditionally, its trade in services rather than trade in goods dominated its Current Account. Why is this not a problem in policy?

Items Latest Latest Previous Period Data Change Period (Y-o- Data Balance of Payments -6.6 16,613.8 S$m Q2/17 4,443.2 S$m -1.0 20,092.9 Current Account Balance Q2/17 21,049.5 Exports of Goods and Services S$m 6.8 184,785.5 Q2/17 188,908.4 Imports of Goods and Services S$m 8.7 159,598.4 Q2/17 161,953.1 S$m Primary Income Balance Q2/17 -2,058.1 -1,496.9 na S$m Secondary Income Balance Q2/17 3,847.7 3,597.3 na S$m 16,744.3 Capital and Financial Account Balance (decrease in assets and liabilities, and net inflows in net balances, are indicated by a minus [-] sign) Q2/17 3,096.3 na. S$m Q2/17 4,443.2 16,613.8 Reserve Assets na Official Foreign Reserves US$m Aug- 273,114.8 17 8.3 269,724.1 Items Latest Latest Previous Period Data Change Period (Y-o- Data Balance of Payments -6.6 16,613.8 S$m Q2/17 4,443.2 S$m -1.0 20,092.9 Current Account Balance Q2/17 21,049.5 Exports of Goods and Services S$m 6.8 184,785.5 Q2/17 188,908.4 Imports of Goods and Services S$m 8.7 159,598.4 Q2/17 161,953.1 S$m Primary Income Balance Q2/17 -2,058.1 -1,496.9 na S$m Secondary Income Balance Q2/17 3,847.7 3,597.3 na S$m 16,744.3 Capital and Financial Account Balance (decrease in assets and liabilities, and net inflows in net balances, are indicated by a minus [-] sign) Q2/17 3,096.3 na. S$m Q2/17 4,443.2 16,613.8 Reserve Assets na Official Foreign Reserves US$m Aug- 273,114.8 17 8.3 269,724.1