SINGAPORE: The Singapore economy is expected to grow by around 1 per cent in 2023, narrowing from a previous forecast range of 0.5 per cent to 1.5 per cent due to subdued external demand.
The updated forecast, released by the Ministry of Trade and Industry (MTI) on Wednesday (Nov 22), came as third-quarter GDP expanded by 1.1 per cent year on year. This is faster than the advance estimate of 0.7 per cent.
On a quarter-on-quarter seasonally-adjusted basis, the economy grew by 1.4 per cent, accelerating from the 0.1 per cent expansion in the second quarter.
“Taking into account the performance of the Singapore economy in the first three quarters of the year – 0.7 per cent year-on-year – as well as the latest external and domestic developments, the 2023 GDP growth forecast for Singapore is narrowed to around 1.0 per cent, from 0.5 to 1.5 per cent,” MTI said.
For 2024, GDP growth is projected to come in at 1 per cent to 3 per cent as major global economies are expected to pick up gradually in the second half of the year.
THIRD QUARTER GROWTH
Growth in the third quarter was supported by sectors such as construction, retail trade, accommodation, as well as finance and insurance.
The construction sector grew by 6.3 per cent year-on-year, extending the 7.7 per cent expansion in the second quarter, as both public and private sector construction output rose.
The retail trade sector expanded by 2.2 per cent year-on-year, extending the 2.4 per cent growth in the previous quarter. Both motor vehicle and non-motor vehicle sales volumes increased during the quarter.
The accommodation sector posted robust growth of 12.9 per cent year-on-year, extending the 13 per cent growth in the second quarter. Growth of the sector continued to be bolstered by the strong recovery in international visitor arrivals, said MTI.
The real estate sector posted growth of 3.4 per cent year-on-year, slowing from the 12.1 per cent expansion in the second quarter.
Manufacturing in the third quarter shrank by 4.6 per cent year on year, compared with the 7.6 per cent contraction in the previous quarter. All clusters within the sector contracted except for the transport engineering cluster.
“Given subdued external demand, Singapore’s manufacturing and trade-related sectors such as precision engineering and water transport are likely to remain weak for the rest of 2023,” said MTI, adding that the ongoing recovery in air travel and tourism is expected to support the growth of sectors such as air transport and accommodation.
“Meanwhile, resilient labour market conditions will continue to lend support to consumer-facing sectors like retail trade and food and beverage services.”