Singapore’s investment commitments took 44% dive at S$12.7B in 2023, but still above EDB target

SINGAPORE: Singapore’s investment commitments took a 44% dive at S$12.7 billion in 2023, a substantial drop from the record figures in 2022, which stood at $22.5 billion in FAI.

The Singapore Economic Development Board (EDB) disclosed these figures at its annual year-in-review briefing on Tuesday, Jan 30, The Business Times reports.

Despite the dip, 2023 showcased higher total business expenditure (TBE) per annum, job creation, and anticipated value-add to the economy as the city-state managed to secure more projects.

EDB Chairman Png Cheong Boon highlighted that Singapore could still attract significant investments amid the challenging global environment.

However, uncertainties loom for 2024 as increased competition and a volatile global environment could pose challenges for surpassing the 2023 numbers.

He emphasised the impact of slower growth and inflationary pressures in various regions, coupled with stronger competition from countries boasting more resources and larger markets.

He acknowledged Singapore’s rising business costs and resource constraints, affecting its competitiveness for foreign direct investments. He expressed, “There is no guarantee that we will be able to secure all our desired projects,” but EDB will “try its best.”

In 2022, an exceptional spike in semiconductor investments resulted in a record S$22.5 billion in FAI, described by EDB Managing Director Jacqueline Poh as a “bumper year” unlikely to be repeated.

The 2023 figure of S$12.7 billion aligns more closely with the historical average of FAI commitments from 2017 to 2021, remaining above EDB’s medium-to-long-term target range of S$8 billion to S$10 billion.

Poh expressed satisfaction that Singapore remained attractive across various sectors, noting that the chemicals sector led 35.6% of FAI commitments in 2023, displacing electronics from its top position the previous year.

Electronics claimed the second-largest share at 24.2%, down from 66.7% in 2022, while research and development (R&D) saw an increase from 6.3% to 16.6%.

The moratorium on new data-centre projects affected the infocommunications and media sector, resulting in zero FAI commitments in 2023, compared to 9.9% in 2022. Poh mentioned that with the moratorium lifted, FAI from this sector is expected to pick up in the coming years.

Investments in 2023 amounted to S$8.9 billion in TBE per annum, surpassing the goal of S$5 billion to S$7 billion. EDB anticipates that the commitments secured in 2023 will create 20,045 jobs, exceeding the medium-to-long-term goal of 16,000 to 18,000.

The United States remained the top source of FAI commitments at 51.9%, followed by Europe at 24.8%.

Png outlined EDB’s strategy to strengthen Singapore’s position in advanced manufacturing, focusing on key sectors such as semiconductors, healthcare, and aerospace.

Additionally, the board aims to explore new growth areas, including the green economy, artificial intelligence, and precision medicine, aligning with the global trends shaping the future./TISG

Read related: SG manufacturing output declined by 2.5% in December