Singapore maintained its forecast for the economy to grow 1 per cent to 3 per cent in 2024, as it warned that downside risks to the global economy remain significant.
In 2023, the economy grew 1.1 per cent, slowing from the 3.8 per cent expansion in 2022, the Ministry of Trade and Industry (MTI) said yesterday. The figure was below the 1.2 per cent official estimate made in January.
Growth in the final quarter of 2023 came in at 2.2 per cent year on year, down from the 2.8 per cent initially estimated. It missed analysts’ average forecast of 2.5 per cent growth, as polled by Bloomberg.
MTI said Singapore’s external demand outlook for 2024 has remained largely unchanged since its last review in November.
“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,” said Dr Beh Swan Gin, MTI’s permanent secretary of development, at a media briefing following the release of the Economic Survey of Singapore 2023.
Regional economies are expected to see a pickup in growth in the year ahead, supported in part by the turnaround in global electronics demand, he added.
However, the global economy still faces serious downside risks. These include the Israel-Hamas conflict, the lagged effects of monetary tightening stressing regional economies with external funding needs and idiosyncratic cost shocks which could weaken the economic recovery momentum.
MTI expects Singapore’s manufacturing and trade-related sectors to see a gradual pickup in growth in tandem with the turnaround in global electronics demand. The electronics and precision engineering industries in particular are projected to rebound, given the stronger-than-expected recovery in semiconductor sales.
The Straits Times
