Singapore economy expanded by 1.1% in 2023
Singapore’s economy grew less than anticipated last year, according to a government announcement on Thursday, which also highlighted ongoing geopolitical risks that could pose challenges in the coming year. Singapore’s economic performance holds significant global relevance due to its heavy reliance on international trade, often serving as a gauge of the global economic climate.
The reported 1.1 percent expansion in 2023, released by the trade ministry, fell short of the 1.2 percent previously estimated by Prime Minister Lee Hsien Loong on New Year’s Eve. While this marked the third consecutive year of growth following the recession induced by the COVID-19 pandemic in 2020, it was notably slower compared to the 3.8 percent growth in 2022 and the impressive 8.9 percent seen in 2021.
The growth forecast for the current year remains unchanged at 1.0-3.0 percent, according to the ministry. Last year’s subdued performance was attributed to weaker global demand for Singapore’s exports, particularly impacting the key manufacturing sector, which contracted by 4.3 percent, reversing the 2.7 percent growth observed in the previous year.
Despite these challenges, the trade ministry stated that Singapore’s external demand outlook for 2024 has largely remained unchanged. However, it noted expectations of moderation in economic growth in major export markets such as the United States and the eurozone, primarily due to persistent tight financial conditions. The gradual recovery is anticipated to align with an expected easing of monetary policy as inflationary pressures subside.
Concerns regarding China’s economy were also highlighted, with projections indicating continued sluggishness in the first half of the year, attributed to weak domestic consumption, exports growth, and property market conditions.
Moreover, the ministry warned of significant downside risks to the global economy, citing potential disruptions stemming from geopolitical tensions such as the widening Israel-Hamas conflict and the war in Ukraine, which could adversely affect global supply chains. Additionally, adverse weather events and the delayed impacts of high interest rates were identified as factors that could potentially dampen any momentum in a global economic rebound.
Overall, the cautious economic outlook underscores the need for Singapore to navigate through ongoing challenges while maintaining resilience in the face of external uncertainties.
Business News: Singapore economy expanded by 1.1% in 2023
