The Singapore economy is expected to grow by around 1 percent in 2023, narrowing from a previous forecast range of 0.5 percent to 1.5 percent 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 percent year on year. This is faster than the advance estimate of 0.7 percent.
On a quarter-on-quarter seasonally-adjusted basis, the economy grew by 1.4 percent, accelerating from the 0.1 percent expansion in the second quarter.
“Taking into account the performance of the Singapore economy in the first three quarters of the year – 0.7 percent 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 percent, from 0.5 to 1.5 percent,” MTI said.
For 2024, GDP growth is projected to come in at 1 percent to 3 percent 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 percent year-on-year, extending the 7.7 percent expansion in the second quarter, as both public and private sector construction output rose.
The retail trade sector expanded by 2.2 percent year-on-year, extending the 2.4 percent 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 percent year-on-year, extending the 13 percent 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 percent year-on-year, slowing from the 12.1 percent expansion in the second quarter.
Manufacturing in the third quarter shrank by 4.6 percent year on year, compared with the 7.6 percent 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.
