Singapore has ranked first in the world, up 6 places in Grant Thornton’s Global Dynamism Index. The Index, based on data collected by the Economist Intelligence Unit, ranks the business growth environments of the 60 largest economies in the world for their overall growth potential within five growth areas – business operating environment, financing environment, labour market, technology, and market growth.

The key reasons for Singapore’s dominant position are:

• The political, legal and governance framework, with high scores being attributed to 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
• Access by firms in Singapore to medium-term financing and the depth of the domestic banking market
• Low corporate tax burden
• Low barriers to international trade and exchange flows
• Low unemployment
• High investment in IT

The Index’s findings accord with Grant Thornton’s own experience operating in Singapore.

Peter Allen, CEO of Grant Thornton Singapore said, “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, 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 Index include lower recent levels of foreign direct investment and reducing percentage of the population less than 30 years of age.

Israel ranked 2nd on the Index, followed by Australia, Finland and Sweden completing the top 5.

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