Singapore’s economic growth exceeded government expectations last year as services grew despite a manufacturing contraction.
GDP is expected to grow by 3.8 percent in 2022, beating official estimates of 3.5 percent, but well below the 7.6 percent growth in 2021.
The city-state’s economy grew 2.2 percent year-on-year in the fourth quarter of 2022, a decline from 4.2 percent growth in the previous quarter, the Ministry of Commerce and Industry noted. Seasonally adjusted, the economy expanded 0.2 percent in the quarter.
“We think growth will weaken further,” said Sivan Tandon, emerging Asia economist at Capital Economics. Singapore’s exports are likely to decline if the global economy enters recession in 2023, he said.
“Higher interest rates, declining household savings and higher inflation are likely to drag down domestic demand,” Tandon added. “We do not expect any further monetary crunch from the Monetary Authority of Singapore.”
The Southeast Asian nation’s manufacturing sector shrank 3 percent year-on-year in the fourth quarter, a reversal from 1.4 percent growth in the previous quarter.
“This came on the back of output contractions in the electronics, chemicals and biomedical manufacturing clusters, which outpaced output expansions in the precision engineering, transport engineering and general manufacturing clusters,” the ministry said.
The construction sector grew 10.4 percent year-on-year in the fourth quarter, up from 7.8 percent growth in the previous quarter. “Public and private sector construction output continues to recover,” the ministry said.
Services grew 2.3 percent year-on-year in the fourth quarter, slower than the 5.7 percent growth in the previous quarter.
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