The Ministry of Trade and Industry (MTI) has announced that Singapore’s economy is expected to grow between 0.5% and 2.5% in 2023. This range was maintained despite slower-than-expected growth in 2022, with the economy expanding by 3.6%, down from the earlier government estimate of 3.8%. The economy was driven by the wholesale trade, manufacturing and other services sectors. In addition, the latest growth report card showed an upward revision in the gross domestic product (GDP) figure for 2021, from 7.6% to 8.9%.
MTI has said that Singapore’s external demand outlook for 2023 has “improved slightly” since its last quarterly report in November, particularly in China where the easing of strict pandemic rules is set to pick up growth. This is expected to benefit Singapore’s sectors such as tourism, aerospace and other regional economies. However, the outlook for Western economies such as the United States and the eurozone remains weak due to tight financial conditions.
MTI also cautioned about uncertainties that remain in the global economy, such as the impact of tighter financial conditions on global growth, as well as the risk of further escalations in the ongoing Ukraine war and geopolitical tensions among major global powers. Against this backdrop, the local economy will likely see an uneven growth outlook ahead.
The recovery in international air travel and inbound tourism, boosted by the relaxation of China’s border restrictions, is expected to bump up growth in sectors such as air transport, accommodation, arts, entertainment and recreation. On the other hand, the growth outlook for other outward-oriented sectors remains weak due to a broader slowdown in the global economy.
MTI has said that taking into account the global and domestic economic environment, the GDP growth forecast for 2023 is maintained at 0.5% to 2.5%. The central bank’s next half-yearly policy review is scheduled for April.
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