Statistics Singapore - Economic Terms and Definitions

Home > Statistical Resources > Glossary > Economic Terms and Definitions

Glossary : Economic Terms and Definitions

| B | C | E | F | I | L | N | O | P | S |

It is a record of all economic transactions between residents of an economy and the rest of the world. It comprises of transactions in goods and services, income flows and transfers, as well as capital and financial flows.

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 earned by Singapore residents from abroad and factor income earned by non-residents from Singapore.
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 serves as the unit of 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 include ceased, struck off, amalgamated, cancelled and dissolved.

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, it has perpetual succession and it can sue or be sued in its own name). 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) during the reference year.

External Trade

Re-Exports

Refers to all goods which are exported from Singapore in the same form as they have been imported (including goods that have undergone minor processing, such as re-packing, splitting into lots, sorting or grading, marking and the like).

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 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.

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.

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

Basic Price

The amount receivable by the producer from the purchaser for a unit of a good or service produced as output minus any tax payable, and plus any subsidy receivable, on that unit as a consequence of its production or sale; it excludes any transport charges invoiced separately by the producer.

Compensation of Employees

It refers to the total remuneration, in cash or in kind, payable by an enterprise to an employee for work done in the reference period.
Compensation of employees comprises
a) Wages and salaries in cash
b) Employers' contribution to CPF or pension funds and insurance schemes
c) Benefits in kind

Constant Price Estimates

Estimates which exclude the effects of price changes from period to period. For example, GDP at constant prices refers to GDP adjusted for price changes.

Consumption of Fixed Capital

Refers to the decline, during the course of the accounting period, in the current value of the stock of fixed assets owned and used by a producer as a result of physical deterioration, normal obsolescence or normal accidental damage.

Current Price Estimates

Estimates which are valued based on prices of the period to which the observation relates. For example, current price estimates for year 2008 are valued at 2008 prices.

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.

Expenditure on Gross Domestic Product (GDP)

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

Government Consumption Expenditure

Refers to the expenditures incurred by the general government on consumption goods and services provided to the general public.

Gross Capital Formation

Refers to the total value of gross fixed capital formation and changes in inventories.

Gross Domestic Product (GDP)

Refers to the aggregate value of the goods and services produced in the economic territory of Singapore. GDP estimates are compiled by the output, expenditure and income approach. See Output-based GDP, Expenditure on GDP and Income Components of GDP.

GDP Deflators

They provide a broad measure of the change in the overall level of prices of the goods and services that make up GDP between the base year and any other period. The deflators are derived as the ratio of the current price value of a component of GDP to its corresponding constant price value, with the base year index set at 100.

Gross Fixed Capital Formation

Refers to acquisitions, less disposals, of fixed assets during the accounting period plus improvements to land.

Gross National Income (GNI)

The sum of gross factor incomes (incomes arising from the involvement in production processes or ownership of assets that may be needed for production) receivable by resident units. See net national income.

Gross Operating Surplus

It measures the surplus or deficit accruing from production before taking account of any interest, rent or similar charges payable on financial or tangible non-produced assets borrowed or rented by the enterprise, or any interest, rent or similar receipts receivable on financial or tangible non-produced assets owned by the enterprise. For unincorporated enterprises owned by households, this component is called “mixed income”.

Households

A household is a group of persons who share the same living accommodation, who pool some, or all, of their income and wealth and who consume certain types of goods and services collectively, mainly housing and food.

Income Components of GDP

Refers to 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 GNI

Refers to the aggregate value of GNI accrued to Singaporeans.

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.

Inventories

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.

Market Prices

Refers to the prices actually paid by the purchaser.

Net factor Income from Abroad

Refers to factor income received by residents of a country from abroad less primary income paid abroad to non-residents.

Net National Income

Gross national income less consumption of fixed capital. See gross national income.

Output-based GDP

Refers to the sum of gross value added generated by economic activities in the domestic economy.

Ownership of Dwellings

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

Private Consumption Expenditure

Refers to the final purchases of goods and services by resident households including non-profit institutions serving households.

Producer's Price

The amount receivable by the producer from the purchaser for a unit of a good or service produced as output minus any VAT, or similar deductible tax, invoiced to the purchaser. It excludes any transport charges invoiced separately by the producer.

Productivity

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 unit of labour input. Value-added (VA) is generally used as the measure of output, while labour input may be measured by number of employed persons or hours worked per employee.

Multifactor productivity (MFP) is a broader indicator that relates output to a set of combined inputs, usually labour and capital. A change in MFP reflects the change in output that cannot be accounted for by the change in combined inputs. MFP therefore measures the effects of changes such as technological progress, changes in the organisation of production, worker-management relations, etc.

Purchaser's Price

The amount paid by the purchaser, excluding any deductible VAT or similar deductible tax, in order to take delivery of a unit of a good or service at the time and place required by the purchaser. The purchaser’s price of a good includes any transport charges paid separately by the purchaser to take delivery at the required time and place.

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.

Taxes on Production and Imports

Consist of taxes payable on goods and services when they are produced, delivered, sold, transferred or otherwise disposed of by their producers plus taxes and duties on imports that become payable when goods enter the economic territory by crossing the frontier or when services are delivered to resident units by non-resident units; they also include other taxes on production, which consist mainly of taxes on the ownership or use of land, buildings or other assets used in production or on the labour employed, or compensation of employees paid.

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

Employment

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.

Establishment

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

Operating Expenditure

Refers to the current expenditure (except capital 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

Refers to the income earned from business operations, 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

Refers to the amount of operating receipts less operating expenditure plus depreciation of fixed assets. For non-profit organizations (i.e. entities which cannot distribute any suplus made 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.

Remuneration

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

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: 20 Jul 2009