Shoppers browse merchandise in a mall in Singapore’s Orchard Road © Isabel Kua/AKUURA
Singapore’s economic growth exceeded government expectations last year as services grew despite a manufacturing contraction.
Gross domestic product grew 3.8 per cent in 2022, beating official estimates of 3.5 per cent, but well short of the 7.6 per cent growth in 2021.
The city-state’s economy grew by 2.2 per cent year-on-year in the fourth quarter of 2022, a decline from the 4.2 per cent growth in the previous quarter, the Ministry of Trade and Industry noted. Seasonally adjusted, the economy expanded by 0.2 per cent quarter-on-quarter.
“We think growth is likely to weaken further,” said Shivaan Tandon, emerging Asia economist at Capital Economics. He said Singapore’s exports are likely to fall if the global economy enters a recession in 2023.
“Elevated interest rates, declining household savings and high inflation are likely to drag on domestic demand,” Tandon added. “We don’t expect further monetary tightening from the Monetary Authority of Singapore.”
The south-east Asian country’s manufacturing sector shrank 3 per cent year-on-year in the fourth quarter, a reversal from the 1.4 per cent growth in the previous quarter.
“This came on the back of output contractions in the electronics, chemicals and biomedical manufacturing clusters, which outweighed output expansions in the precision engineering, transport engineering and general manufacturing clusters,” the ministry said.
The construction sector grew by 10.4 per cent year-on-year in the fourth quarter, accelerating from 7.8 per cent growth in the previous quarter. “Both public and private sector construction output continued to recover,” the ministry said.
Services grew by 2.3 per cent year-on-year in the fourth quarter, slower than the 5.7 per cent growth in the previous quarter.