SINGAPORE: Singapore’s 2023 GDP growth is 1.1%, slightly lower than earlier estimates, according to data from the Ministry of Trade and Industry (MTI) released on Thursday, Feb 15.
The Business Times reported that initial estimates had pegged full-year growth at 1.2%, marking a slowdown from the 3.8% growth recorded in 2022.
The downward revision came as fourth-quarter gross domestic product (GDP) growth was adjusted to 2.2% year-on-year, down from the advance estimate of 2.8%. However, this still represented an improvement from the third quarter’s 1% expansion.
On a quarter-on-quarter basis, the economy grew by 1.2% in Q4, a slight increase from the previous quarter’s 1% growth, although lower than the initial estimate of 1.7%.
Despite the revision, MTI maintained its growth forecast for 2024 from 1 to 3%, citing stable external demand conditions since its last economic survey in Nov 2023.
Growth in advanced economies in the first half of the year “expected to moderate”
According to MTI, growth in advanced economies is “expected to moderate” in the first half of the year due to tight financial conditions before gradually recovering as inflationary pressures ease.
Regional economies are anticipated to see a pickup in growth, partly driven by increased global demand for electronics.
However, MTI warned of significant downside risks, such as potential disruptions to global supply chains and commodity markets due to war conflicts.
Monetary tightening could also expose vulnerabilities in banking and financial systems, particularly in economies reliant on external financing.
Edward Robinson, Chief Economist at the Monetary Authority of Singapore (MAS), stated that Singapore’s current monetary policy stance “remains appropriate,” with the next policy statement scheduled for April 2024. He highlighted ongoing uncertainties in both growth and inflation.
Looking ahead, Singapore’s manufacturing and trade-related sectors are expected to gradually improve, driven by global demand for electronic components.
The manufacturing sector, particularly electronics and precision engineering clusters, is forecasted to rebound following a decline in 2023, attributed to the normalisation of inventory levels and increased demand for semiconductor products.
The wholesale trade sector is also expected to benefit from higher external demand for electronic components, telecommunications, and computers.
Additionally, the recovery in air travel and tourism is anticipated to support growth in aviation-related sectors and consumer-facing industries such as retail and food services, albeit slower than in 2023.
Singapore’s Sectoral Performance
In 2023, GDP growth was primarily driven by the other services, information and communications, and transportation and storage sectors, according to MTI Permanent Secretary (Development) Dr Beh Swan Gin.
The goods-producing industries, comprising manufacturing and construction, experienced a contraction of 2.9%.
The manufacturing sector contracted 4.3% in 2023, except for transport engineering, while the construction sector grew by 5.2%, driven by expansions in both public and private-sector construction works.
The services-producing industries expanded by 2.3%, with other services up by 4.4%, information and communications by 5.7%, and transportation and storage by 2.3%.
In the fourth quarter, most sectors experienced year-on-year growth, except for retail trade, food and beverage services, professional services, and administrative and support services.
The finance and insurance sector saw the sharpest growth in Q4, at 5.4 per cent, while the manufacturing sector rebounded with a 1.4% growth year-on-year.
Overall, while Singapore’s economy faced challenges and revisions in 2023, it remains resilient, with forecasts suggesting continued “moderate” growth in 2024. /TISG
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