Singapore economy: 2023, Q4 GDP

SINGAPORE — Singapore’s economy grew 2.2% year-on-year in the fourth quarter last year, falling short of the government’s advance estimates of a 2.8% growth as manufacturing activity shrank, official data on Thursday showed.

The reading, however, marked a sharp increase from the 1% growth in the previous quarter.

On a quarter-on-quarter seasonally-adjusted basis, Singapore’s economy expanded 1.2% in the fourth quarter, slightly better than the 1% growth in the third quarter, according to the Ministry of Trade and Industry.

The economy as a whole grew 1.1% in 2023 — as the government revised down the full-year economic growth from an earlier estimate of 1.2%.

Full-year growth was slower than the 3.8% expansion in 2022. Last year’s growth was largely driven by “other services industries” which grew by 3.9% year-on-year. Information and communications, as well as transportation and storage sectors also drove growth.

The manufacturing sector — a key driver of the economy — contracted by 4.3%, reversing from the 2.7% growth in 2022. Singapore’s construction sector grew by 5.2%, an improvement from the 4.6% expansion in 2022.

Growth in the information and communications sector came in at 4.7% year-on- year, slower than the 6% growth in the preceding quarter, while the finance and insurance sector grew 5.4% year-on-year, faster than the 2.5% growth in the previous quarter.

The GDP growth forecast for 2024 was maintained at 1% to 3%, the ministry said.

“Singapore’s manufacturing and trade-related sectors are expected to see a gradual pickup in growth in tandem with the turnaround in global electronics demand,” said the release. A continued recovery in air travel and tourism demand will also lend support to Singapore’s tourism and aviation-related sectors.

That said, global economic headwinds remain, the ministry said, citing the ongoing conflict in Gaza and Ukraine, as well as the “lagged effects of monetary tightening,” as some of the reasons.

The Singapore dollar was trading at 1.347 against the U.S. dollar after the data release.