Singapore Trims 2023 Growth Outlook

Singapore narrowed its growth projection for the current year citing subdued foreign demand but the pace of expansion is forecast to improve next year with the recovery in global economies.

Given its performance in the first three quarters as well as the external and domestic conditions, the Ministry of Trade and Industry said the economy is set to grow around 1.0 percent this year, compared to its previous outlook of 0.5 to 1.5 percent.

The city-state economy is forecast to expand 1.0 to 3.0 percent in 2024 as growth in the major economies are set to pick up gradually in the second half.

Singapore’s economy expanded 1.1 percent on a yearly basis in the third quarter, faster than the 0.5 percent growth in the previous quarter, official data released on Wednesday revealed.

The third quarter figure was revised up from 0.7 percent estimated initially.

On a quarter-on-quarter seasonally-adjusted basis, gross domestic product grew 1.4 percent, accelerating from the 0.1 percent expansion in the previous quarter, and also better than the advance estimate of 1.0 percent.

Although economic growth rebounded strongly, the strength is unlikely to last, Capital Economics’ economist Gareth Leather said.

Leather reckoned that a combination of weaker global demand and high interest rates will cause growth to slow over the next couple of quarters.

The Monetary Authority of Singapore had projected economic growth to come in at the lower half of the 0.5-1.5 percent forecast range in 2023.

In October, the bank had kept its monetary policy unchanged as the current setting is assessed to be ‘sufficiently tight’ to dampen imported inflation and curb domestic cost pressures.

On the production-side, other services industries, information and communications, and wholesale trade contributed the most to the GDP growth, data showed.

The other services industries posted an annual growth of 4.4 percent. The information and communication sector expanded 5.6 percent and wholesale trade advanced 1.2 percent.

Retail trade grew 2.2 percent and transportation and storage sector moved up 1.1 percent.

The accommodation sector and food and beverage services sector expanded 12.9 percent and 3.5 percent, respectively.

Further, the finance and insurance sector expanded 1.5 percent and the real estate sector posted growth of 3.4 percent.

The construction sector output climbed 6.3 percent, while manufacturing shrank 4.6 percent.

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