Singapore narrows GDP view after 2Q23 growth slows

SINGAPORE narrowed its projection for 2023 growth after the economy fared worse than initially thought amid China’s faltering recovery and a global demand downturn. 

The outlook for full-year growth was cut to a range of 0.5%-1.5% from 0.5%-2.5% previously, according to a statement from the Ministry of Trade and Industry last Friday. That followed final estimates that showed GDP expanded 0.1% last quarter from the previous three months, slower than the 0.3% pace expected initially. 

The trade ministry said the economy grew 0.5% in the second quarter (2Q23) from a year ago, compared to an earlier estimate of 0.7% expansion. 

The weak numbers signal more challenges for the trade-reliant economy, with manufacturing hit by falling global demand for goods. Recovery in China, Singapore’s largest commerce partner, is clouded by slowing consumption growth and a slump in construction, while US expansion is expected to slow in the remaining quarters of the year amid higher borrowing costs and a cooling labour market. 

Singapore authorities flagged risks of a sharper retraction in global spending as advanced economies stand poised to tighten financial conditions to curb persistent inflation. They also warned of renewed supply disruptions and dent to global trade if there’s any escalation in the war in Ukraine and geopolitical tensions among global powers. 

Further 2Q23 GDP details, year-on-year (YoY), from the MTI include:

• Manufacturing declined 7.3% year-on-year, after 5.4% drop in the previous quarter.

• Construction expanded 6.8% from a year ago, after 6.9% growth in 1Q23. 

• Services-producing industries rose 2.6% YoY, compared to 1.9% in previous three months. — Bloomberg 

  • This article first appeared in The Malaysian Reserve weekly print edition