Nomura sees significant 3% GDP growth for Singapore’s economy in 2024

SINGAPORE: Leading financial institution Nomura sees a significant 3% GDP growth for Singapore’s economy in 2024, marking a notable improvement from the 1.2% increase observed in the previous year, Singapore Business Review reports.

The driving force behind this expected surge lies in the manufacturing sector’s performance.

According to Nomura’s Coincident Monthly Activity Indicator (NCMAI), their latest GDP growth forecast aligns with the upper boundary of the government’s official projection, which ranges from 1% to 3%.

In addition, it surpasses the consensus estimate of 2.3%, indicating a promising trajectory for Singapore’s economic landscape.

Nomura attributes this anticipated resurgence primarily to the anticipated global rebound in the technology sector.

“We expect the strong rebound to be led by the global tech turnaround, which should boost overall manufacturing output.”

Such a turnaround is poised to significantly help the manufacturing output, a sector pivotal in Singapore’s economic ecosystem. Notably, the sturdy growth in manufacturing has already counterbalanced the sluggishness observed in the services sector.

In light of recent developments, Nomura has revised its 2024 GDP growth forecast upwards from 2.8% to reflect a more optimistic outlook.

One contributing factor to this adjustment is the reassessment of the United States economy, with Nomura no longer anticipating a recession within its borders this year.

Despite the promising growth outlook, Nomura cautions that inflation is expected to “remain sticky this year.” However, there is a glimmer of hope as Nomura foresees a gradual softening of inflationary pressures, particularly in the fourth quarter of 2024.

The persistence of inflationary pressures may influence the central bank’s policy stance regarding foreign exchange (FX). Nomura suggests that the central bank might maintain a steady FX policy stance initially, with the possibility of some easing towards the end of the year in response to the prevailing inflationary environment.

Looking ahead, Nomura anticipates a downward revision of the fourth-quarter GDP growth rate. Initial estimates placed it at 2.8%, but it is expected to be revised down to 2.5% due to the lower-than-expected expansion of industrial production. /TISG

Read also: IMAS survey: 57% expect stable global growth in Asian financial markets in 2024