The Monetary Authority of Singapore kept its policy unchanged due to its confidence in the country’s economic development for 2024.
In a statement today, MAS notes the economic activity in Singapore’s major trading partners was resilient in the last quarter of 2023. In the near term, global growth is expected to be impacted by the lagged effects of elevated interest rates in the advanced economies. However, global final demand should pick up later this year, as lower inflation sustains private consumption expenditure, and monetary policy settings in the major economies turn more supportive. This outlook is subject to uncertainties, particularly stemming from ongoing geopolitical conflicts which could precipitate negative global supply and demand shocks.
MTI’s Advance Estimates show that growth in the Singapore economy picked up to 1.7% on a quarter-on-quarter seasonally-adjusted basis in the last quarter of 2023, from 1.3% in Q3 and an average of −0.1% in the first half of the year. This strengthening in momentum was mainly attributable to the external-facing sectors. For 2023 as a whole, the Singapore economy is estimated to have expanded by 1.2%.
Prospects for the Singapore economy should continue to improve in 2024, with GDP growth projected to come in between 1–3%. The recovery in the manufacturing and financial sectors should be supported by the turnaround in the electronics cycle and anticipated easing in global interest rates, respectively, even as growth in the domestic-oriented sectors further normalises towards pre-pandemic rates. Consequently, the slightly negative output gap in 2023 will narrow in the second half of 2024
