SINGAPORE: Singapore has trimmed its growth forecast for 2023 amid expectations for demand from key external economies to remain weak ahead.
The Ministry of Trade and Industry (MTI) said on Friday (Aug 11) that the country’s gross domestic product (GDP) for this year is now expected to come in between 0.5 to 1.5 per cent, narrowing from the previous 0.5 to 2.5 per cent range.
The decision comes alongside data showing the economy growing by 0.5 per cent year-on-year in the second quarter.
This is a notch below the advance estimate of 0.7 per cent, but slightly advancing from the 0.4 per cent growth in the first quarter.
On a quarter-on-quarter seasonally-adjusted basis, Singapore’s economy expanded marginally by 0.1 per cent between April and June. This marked a reversal from a 0.4 per cent contraction in the first quarter but underperforming the advance forecast of 0.3 per cent.
For the first half of the year, Singapore’s GDP growth averaged 0.4 per cent on a year-on-year basis.
“WEAK” EXTERNAL DEMAND FOR REST OF 2023
In its quarterly assessment, MTI said it sees a “weak” external demand outlook for the rest of the year.
Apart from the expected slowdown in Singapore’s key external demand markets, the downturn in the global electronics sector will also likely be protracted with a gradual recovery happening only “towards the end of the year at the earliest”, it said.
At the same time, there remain downside risks in the global economy.
These include more persistent-than-expected inflation in the advanced economies which could induce tighter global financial conditions and in turn lead to a sharper pullback in global spending and worsen the ongoing manufacturing downturn.
Escalations in the war in Ukraine and geopolitical tensions among major global powers also add to the risk of renewed supply disruptions, dampen consumer and business confidence, as well as weigh on global trade.