SINGAPORE’S economy grew 1.1 per cent in 2023, revised down marginally from advance estimates, data from the Ministry of Trade and Industry (MTI) showed on Thursday (Feb 15).
Advance estimates released early in January had put full-year growth at 1.2 per cent, moderating from the 2022 full-year growth figure of 3.8 per cent.
The downward revision came as fourth-quarter gross domestic product (GDP) growth was revised down to 2.2 per cent year on year, lower than the advance estimate of 2.8 per cent, but still marking an acceleration from the third quarter’s 1 per cent expansion.
On a quarter-on-quarter seasonally adjusted basis, the economy expanded by 1.2 per cent in Q4, picking up slightly from 1 per cent in Q3. This was also down from the advance estimate of 1.7 per cent.
MTI kept its 2024 growth forecast range unchanged at 1 to 3 per cent, noting that the external demand outlook has remained mostly unchanged since its last economic survey in November last year.
“Growth in the advanced economies is expected to moderate in the first half of the year, mainly due to continued tight financial conditions, before recovering gradually in line with an expected easing of monetary policy as inflationary pressures recede,” MTI said.
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It added that a pickup in growth is expected in the regional economies this year, partly supported by the turnaround in global electronics demand.
But the ministry highlighted that downside risks remain significant. For instance, escalation of the Israel-Hamas conflict or war in Ukraine could disrupt global supply chains and commodity markets, weighing on global trade and growth.
The lagged effects of monetary tightening could trigger latent vulnerabilities in banking and financial systems, putting stress on regional economies with external financing needs.
And if the global disinflation process is disrupted by cost shocks such as adverse weather conditions, financial conditions could stay tight for longer, weakening economic recovery momentum.
For Singapore, growth in the manufacturing and trade-related sectors is expected to pick up gradually with the turnaround in global electronics demand.
In particular, the manufacturing sector’s electronics and precision engineering clusters are projected to rebound, especially given the stronger-than-expected recovery in semiconductor sales globally and domestically.
The wholesale trade sector’s machinery, equipment and supplies segment will also gain from higher external demand for electronic components as well as telecommunications and computers.
The continued recovery in air travel and tourism demand will also support growth in Singapore’s tourism and aviation-related sectors, including aerospace, air transport and accommodation, as well as consumer-facing sectors such as retail trade and food and beverage services. Still, the pace of growth for most of these sectors is expected to moderate from that in 2023.
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