Shoppers browse merchandise at a mall on Orchard Road in Singapore © Isabel Kua/Portal
Singapore’s economic growth exceeded government expectations last year as services picked up despite a fall in output.
Gross domestic product grew 3.8 percent in 2022, beating official estimates of 3.5 percent but significantly less than 7.6 percent growth in 2021.
The city-state’s economy grew 2.2 percent year-on-year in the fourth quarter of 2022, down from growth of 4.2 percent in the previous quarter, the Department of Trade and Industry noted. Seasonally adjusted, the economy grew by 0.2 percent 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.
“Higher interest rates, falling household savings and high inflation are likely to weigh on domestic demand,” Tandon added. “We do not expect any further monetary tightening from the Monetary Authority of Singapore.”
The Southeast Asian country’s manufacturing sector shrank 3 percent year-on-year in the fourth quarter, a reversal of growth from 1.4 percent in the previous quarter.
“This was due to production declines in the electronics, chemicals and biomedical manufacturing clusters, which outweighed production expansions in the precision engineering, transportation engineering and general manufacturing clusters,” the ministry said.
The construction sector grew 10.4 percent year-on-year in the fourth quarter, accelerating from 7.8 percent growth in the previous quarter. “Both public and private sector construction output continued to recover,” the ministry said.
Services grew 2.3 percent year over year in the fourth quarter, slower than the previous quarter’s 5.7 percent growth.