Singapore’s GDP to grow by 1% to 3% next year in Year 2024

A quarter-on quarter basis, adjusted for seasonality, the economy grew by 1.4%, an acceleration from the 0.1 % expansion in the previous quarter.

The continued recovery in air travel, inbound tourism and other sectors has helped to boost growth in July-August. As a result, the labour market is still able to support sectors that are geared towards consumers such as retail and food and beverages services.

Still, higher interest rates combined with a Chinese economy slower than expected have kept the overall growth low.

MTI predicts that in 2024 the growth of GDP in major economies, such as the United States, and the eurozone, will continue to be slowed in the first part of the year, due to tight financial conditions. It is then expected to increase gradually in the latter half.

Singapore’s economic growth is expected to range between 1 and 3 percent in 2024 due to modest improvements in trade-related industries, according to the Ministry of Trade and Industry.

MTI’s latest quarterly Economic Survey report stated that the growth rate in 2023 would be approximately 1 percent due to a weakening export demand.

The forecast for the first quarter of this year was lowered by a lot from the previous range of 0.5% to 1.5% announced in August.

The forecast for 2023 is now a 12 to 12.5% decline in key domestic non-oil products (Nodx), compared to the August forecast of a 9 to 10% contraction.

Nodx growth is expected to increase by 2 to 4 percent between 2024 and 2025, in conjunction with the expected turnaround of global electronics demand.

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In 2023 the manufacturing sector will shrink by 4.6 percent compared to 7.6 percent in the previous quarter. Transport engineering was the only cluster that grew.

The construction industry grew by 6.3%, which is a continuation of the 7.7% growth in the second-quarter, with both the private and public sectors increasing their output.

Information and Communications sector growth slowed from 7 percent in the second half of the year to just 5.6 percent. The real estate industry grew at a slower rate of 3.4 per cent compared to the previous quarter’s 12.1 per cent.

Core inflation rates in advanced economies, which exclude volatile food and fuel costs, may encourage central banks maintain high interest rate levels for longer. The escalation of the Israel/Hamas conflict and the war in Ukraine may also lead to new supply disruptions, which could cause commodity prices to rise.

These factors may have a negative impact on consumer and business attitudes, as well as demand. The result could be a global slowdown and a decrease in trade.

MTI reported that the gross national product (GDP) grew by 1,1% year-on year in Q3, a higher rate than the 0.5% growth in the 2nd quarter and the 0.4% in the 1st three months of 2023. MTI had estimated a growth rate of 0.7 percent.

Analysts say a better-than expected third-quarter result could be a signal of stabilisation following anaemic growth during the first half. It could also signal a possible recovery in 2024.

The normalisation of inventories, along with the global manufacturing industry’s turnaround, will likely occur over the next year. The global demand for electronics is expected to rebound, which will boost the growth in most regional economies.

Enterprise Singapore, on Nov 22, predicted that key exports would recover modestly in 2024. This was after it lowered its forecasts for 2023 due to an unexpectedly poor performance.

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