Statistics Singapore - Economic Terms and Definitions

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Glossary : Economic Terms and Definitions

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It is a record of a country's international transactions, ie, between its residents and those of the rest of the world. It comprises the transactions on goods and services, transfer payments and capital flows. It is also generally known in national accounts as external transactions.

Goods Balance	Refers to the difference between total exports and total imports of goods on a free-on-board (f.o.b.) basis.
Services Balance	Refers to the difference between total exports and total imports of services.
Income Balance	Refers to the difference between factor income accrued to Singapore residents from abroad and factor income accrued to non-Singapore residents.
Current Account Balance	Refers to the balance of transactions in goods, services, income and current transfers. It shows the net change in financial assets arising from Singapore’s real transactions.
Capital and Financial Account Balance	Refers to the balance of transactions in the capital and financial account. It reflects the net changes in Singapore’s foreign financial assets and liabilities.
Overall Balance	Refers to the overall balance of the current, capital and financial accounts. It is the balance of all of Singapore’s transactions with non-residents and is financed by official reserves.

External Transactions Account

Special Drawing Rights (SDR)

Refers to an international reserve asset created by the International Monetary Fund (IMF) and allocated to its members in proportion to their quotas as a supplement to existing reserve assets. The SDR is a unit account of the IMF. The valuation of the SDR is determined on the basis of a basket of four currencies: the US dollar, the Euro, the Japanese Yen and the Pound Sterling.

Companies and Businesses

Business

Refers to a business firm, operating either as a sole-proprietorship or a partnership. It may be set up by individuals or companies. However, a business firm, not being a legal entity, cannot register another business firm. A sole-proprietorship is a business firm owned by one person or one company. There are no partners. The sole-proprietor has absolute say in the running of the business firm. A partnership may have between two and twenty partners. If there are more than twenty partners, the business entity must be registered as a company under the Companies Act, Chapter 50.

Cessation of companies/businesses

Refers to companies and businesses which have ceased operation during the reference year. Cessation status includes ceased operations, struck off, liquidated, dissolved or under receivership.

Company

Refers to a business entity registered under the Companies Act, Chapter 50. It has a legal personality (i.e. it has the right to own properties, to sue or be sued). It usually has the words ‘Pte. Ltd.’ or ‘Ltd.’ as part of its name.

Formation of companies/businesses

Refers to companies and businesses registered with the Accounting and Corporate Regulatory Authority (ACRA) and other relevant organisations (e.g. The Law Society of Singapore, Singapore Medical Council, Board of Architects or Professional Engineers Board).

External Trade

Re-Exports

All goods which are exported in the same form as they have been imported without any transformation. Repacking, sorting or grading, marking and the like are not considered as undergoing the process of transformation.

Retained Imports

Goods imported and kept in the country for domestic use. See Re-exports.

Financial and Insurance

Official Foreign Reserves

Refers to the gross official reserves held by the Monetary Authority of Singapore (MAS). The data include gold and foreign exchange, Special Drawing Rights (SDR) and Singapore’s reserve position in the International Monetary Fund (IMF). Prior to May 1999, Singapore’s official foreign reserves were valued at book cost. With effect from May 1999, the book value of foreign reserve assets are translated at market exchange rates prevailing at the end of each reporting month.

Industrial Production

Index of Industrial Production

An index that measures changes in the volume of industrial production with respect to the base year. The index charts the growth in production of each major industry and of the manufacturing sector.

Investments

Direct Equity Investment

Comprises ordinary paid up shares of affiliates and the amount of reserves (e.g. retained surpluses, revaluation gains, share premium) attributable to the parent companies. For branches of non-banks, the net amount due to the parent companies is taken as an approximation of the magnitude of direct equity investment. For branches of banks, the net fixed assets of the branch is used.

Direct Investment

Refers to investment in affiliates in which the parent company owns at least 10 per cent of the total paid up shares. It is made up of Direct Equity Investment and Net Inter-Company Debt.

Net Inter-Company Debt

Refers to the net outstanding debt owed by affiliates to their parent companies. The debt could be in the form of loans, debt securities and trade credits.

Labour, Employment and Wages

Monthly Nominal Earnings

Refers to all remuneration received before deduction of the employee’s Central Provident Fund (CPF) contributions and personal income tax. They include basic wage, overtime payments, commissions, allowances and other monetary payments, annual wage supplement (AWS) and variable bonuses but exclude employer’s CPF contributions.

National Accounts

Capital Consumption

(Also known as depreciation). The value, at current replacement cost, of the reproducible fixed assets such as buildings, plants and machinery used during a period of time as a result of normal wear and tear, foreseen obsolescence and the normal rate of accidental damage. The use of roads, dams and other forms of public construction other than structures of the producers of government services are not included as part of capital consumption.

Compensation of Employees (Employees' Remuneration)

Payments of wages and salaries, pensions and allowances by resident producers to their employees. Such payments may be in cash or in kind. Contributions to pension funds (both paid or imputed), as well as various welfare schemes, eg, social security, family allowance, casualty insurance, life assurance are included as part of compensation of employees.

Constant Price Estimates

Estimates which exclude the effects of price changes from period to period. See Deflator.

Domestic Territory

In addition to the territory lying within the political frontiers of a country, domestic territory includes:

a) ships and aircraft which are entirely or mainly operated by residents of the country;

b) fishing vessels, oil and natural gas rigs, and floating platforms which are wholly or mainly operated by the residents of the country; and

c) the embassies, consulates and military establishments of the country located abroad.

However, it excludes overseas territories and possessions.

Enterprise

An enterprise is an organisation which produces and sells goods and services with the objective of making profits. It may comprise one or more establishments.

Expenditure on Gross Domestic Product (GDP)

Refers to the sum of private consumption expenditure of households including non-profit institutions, government consumption expenditure, gross capital formation and net exports.

Factor Cost

A term used in the valuation of GDP, to measure what it costs to produce the output of the nation in terms of payments to the factors of production used, namely, compensation of employees, and gross operating surplus. See Market prices.

Factors of Production

Factors employed in the production of goods and services. These refer to the total human effort of workers as well as land (including natural resources), capital and entrepreneurship.

Government Consumption Expenditure

The value of goods and services used by various government departments and institutions in order to provide goods and services to the general public. Normally, such goods and services cannot be conveniently or economically produced by business enterprises. Examples are public administration and defence.

Gross Capital Formation

It refers to purchases of fixed assets, increases in stocks of materials and finished goods, and increase in work-in-progress before deducting capital consumption.

Gross Domestic Product (GDP)

Refers to the aggregate value of output produced within the domestic territory of Singapore.

Gross Domestic Product (GDP) at Constant Prices

In order to compare the real value of output/expenditure over time, it is necessary to remove the effect of price changes. This is achieved by selecting the price structure of the base year according to which the goods and services in other years are revalued. The resulting aggregates after adjustment for price changes are known as constant-price estimates.

GDP Deflator

It is the aggregate price index of the GDP of the economy. It measures implicitly the price level of the current GDP with respect to the base year which is equal to 100. The deflator is derived as the ratio of the current price estimate of the year in question to that of the base year.

Gross Fixed Capital Formation

It refers to capital expenditure on fixed assets before deducting capital consumption.

Gross National Income (GNI)

The total income receivable by the residents and resident institutional units of a country during a period of time before subtracting capital consumption. See Net national income.

Gross Operating Surplus

It is the value attributed to non-labour factors of production before deducting capital consumption.

Households

Comprise individuals and private non-profit organisations.

Income Components of Gross Domestic Product (GDP)

Refersto the sum of incomes receivable by each institutional sector from the domestic production of goods and services which includes compensation of employees, gross operating surplus and taxes (less subsidies, if any) on production and on imports.

Indigenous Gross National Income (GNI)

Refers to the aggregate value of GNI accrued to Singaporeans.

Indirect Taxes

Taxes assessed on producers for the production, sale, purchase or use of goods and services which are charged to the expenses of production. Import duties are included as indirect taxes.

Input-Output Tables

A set of tables displaying the inter-relationship between producers and consumers and the inter-dependence among different industries, by tracing the flow of commodities from one industry to another.

Market Prices

The value of output at factor cost plus indirect taxes less subsidies. See Factor cost.

Net factor Income from Abroad

The excess of factor income received by residents of a country from abroad over factor income paid abroad to non-residents.

Net National Income

The total income receivable by the residents and resident institutional units of a country during a period of time less capital consumption.

Nominal GNI

The value of gross national income at current prices.

Ownership of Dwellings

It refers to housing services provided by owner-occupiers and individuals who let out their residential properties.

Private Consumption Expenditure

Purchases of goods and services by households including private non-profit institutions serving households.

Productivity

It measures how much output is produced relative to the inputs of labour, capital (plant and equipment) and technology. An increase in productivity implies that more output can be produced with the same (or less) inputs. Labour productivity measures output per worker. On an economy-wide basis, it is usually expressed as a ratio of real Gross Domestic Product (GDP) to total employment. Multifactor productivity is a broader indicator that measures the productive efficiency of a combined set of two or more factor inputs, usually labour and capital.

Real Gross Domestic Product

It refers to gross domestic product valued at constant prices to eliminate the impact of price changes.

Residence

A concept used for the compilation of the national accounts and balance of payments estimates. Residents of a country include individuals residing in the country, corporations and enterprises located in the country as well as its embassies, military units, and official missions stationed abroad.

Stocks

The amount of raw materials, components, work-in-progress and finished goods held. Construction work-in-progress is not part of stocks but part of fixed assets.

Prices

Consumer Price Index

It measures the average change in the price of a fixed basket of goods and services consumed by the households over time.

Services

Establishment

Refers to a business or organization unit engaged in one activity and generally operating in a single location.

Operating Expenditure in the Services Sector

Refers to the current expenditure pertaining to the business operations such as purchases of goods and services and remuneration It includes depreciation and adjustment for changes in stocks and work-in-progress. For local branches of foreign airlines and foreign shipping lines, operating expenditure refers only to expenses incurred by the branch offices in providing support services to their head offices (i.e. foreign airlines and foreign shipping lines) and expenses paid by them on behalf of their head offices.

Operating Receipts/Turnover in the Services Sector

Refers to the income earned from business operation, i.e. income from sales of goods, services rendered, commissions and rental of premises, machinery and equipment. For local branches of foreign airlines and foreign shipping lines, operating receipts refers to the reimbursement from their head offices for the operating expenditure they incurred.

Operating Surplus in the Services Sector

Refers to the amount of operating receipts less operating expenditure plus depreciation of fixed assets. For non-profit organizations (i.e. entitles which cannot distribute any suplus to their shareholders) which mainly rely on funds (such as grants and donations) other than receipts from sales of goods and services rendered to cover their operating expenditure, operating surplus refers only to depreciation of fixed assets.

Employment in the Services Sector

Refers to the total number of persons engaged, including part-time employees, working proprietors and partners, working directors and unpaid family workers as at 30 June of the reference year. It includes those temporarily away on leave.

Remuneration in the Services Sector

Refers to the amount paid to employees in the form of wages and salaries, bonuses and allowances, Central Provident Fund (CPF)/Pension Fund contributions and that given to unpaid family workers and directors as allowances, fees and benefits in kind.

Value Added in the Services Sector

Refers to the sum of the value of operating surplus, remuneration and indirect taxes.

Others

Base Year

The year used as a reference point for comparison with some later year. For example, when compiling an index number series, the index is normally denoted as 100 in the base year.

C.I.F. (Cost, Insurance and Freight)

The value of goods including the cost of international freight and insurance up to the customs frontier of the importing country paid by the importers. The cost of unloading the goods from the ship, aircraft or vehicle is not part of c.i.f. value, unless it is borne by the carrier. See F.o.b. and Shipment.

F.O.B. (Free On Board)

The value of goods valued at the customs frontier of the exporting country including export duties and the cost of loading the goods onto the carrier unless the latter cost is borne by the carrier. All international freight and insurance beyond that point is excluded from the value of goods and reclassified in shipment.

Index Number

A number that measures the difference in the level of price, volume, or value of a set or 'basket' of related items between a selected base period and the current period.

Last updated: 3 Apr 2008