Singapore Upgrades Economic Growth Forecast
On Tuesday, Singapore announced an upward revision to its economic growth forecast for the year, following better-than-expected results in the second quarter and a positive outlook for the manufacturing sector’s gradual recovery.
The Trade Ministry now anticipates that the export-driven economy will grow between 2 and 3 percent this year, an improvement from the earlier projection of 1 to 3 percent. In comparison, the economy expanded by 1.1 percent last year and recorded a growth rate of 3.8 percent in 2022.
As a city-state heavily reliant on international trade, Singapore’s economic performance is often viewed as an indicator of global economic conditions. According to the latest data from the Trade Ministry, the economy grew by 2.9 percent year-on-year in the second quarter, surpassing the estimated growth of 2.7 percent and following a 3.0 percent expansion in the preceding three months.
In terms of key export markets, the ministry noted a gradual easing in demand from the United States due to slowing consumption, while China’s economy is expected to “expand at a slightly slower pace” in the latter half of the year. Conversely, growth in the eurozone is predicted to improve, and key Southeast Asian economies are expected to see a slight uptick.
“On balance, Singapore’s external demand outlook is expected to be resilient for the remainder of the year,” the ministry stated. However, it cautioned about potential challenges, including the possible “intensification of geopolitical and trade conflicts” and tighter financial conditions that could lead to “market volatility or expose latent vulnerabilities in banking and financial systems.”
Manufacturing, a critical sector for the economy, contracted by 1 percent year-on-year in the second quarter, largely due to weak output in the pharmaceuticals sector. Nonetheless, this decline was less severe than the 1.7 percent contraction experienced in the first quarter.
