SINGAPORE: The Republic moved up six places to top the Grant Thornton’s Global Dynamism Index, which ranks the growth potential of 60 large economies.
Israel ranked second on the Index, with Australia, Finland and Sweden completing the top 5.
The rankings, based on a survey of 406 senior executives conducted by the Economist Intelligence Unit, were announced on Thursday (Oct 29). The annual index ranks the business growth environments of the 60 largest economies in the world for their overall growth potential in 22 indicators within five growth areas: Business operating environment, financing environment, labour market, technology, and market growth.
Of the 5 growth areas, Singapore came in tops in the growth potential for its financial environment and scored between 12th and 25th on the other four areas. Of Asian economies, Taiwan (joint 9th), China (14th), Malaysia (16th) and South Korea (18th) made the top 20.
According to the authors of the research project, Singapore came in top overall due to a combination of factors, including a political, legal and governance framework which meant "political stability, the low level of legal and regulatory risk, the high quality of the financial regulatory system, and government encouragement of private enterprise and competition".
Singapore was also feted for the access firms in the Republic could get to medium-term financing; the depth of the domestic banking market; the low corporate tax burden; low barriers to international trade and exchange flows; low unemployment; and the high level of investment in IT.
Said Mr Peter Allen, CEO of business advisory firm Grant Thornton Singapore: “This is a strategically crucial market for us where the very stable political, legal and regulatory framework makes it a natural hub for our clients’ operations in the region.
"Still, there are some areas for improvement. Singapore’s labour productivity growth remains low, scoring only slightly better than Greece. The other weak spot is inward M&A (mergers and acquisitions), which has been held back by disparities in pricing expectations. Although the current relative softness of the Singapore dollar may help this, we fear that vendors of Singaporean businesses may need to adjust their price expectations over the next year or two.”
Other areas of improvement noted by the authors of the Index include lower recent levels of foreign direct investment and falling proportion of the population aged 30 or below.