Singapore’s economic growth exceeded government expectations last year as services grew despite a manufacturing contraction.
Gross domestic product grew 3.8 percent in 2022, beating official estimates of 3.5 percent, but well short of the 7.6 percent growth in 2021.
The city-state’s economy grew by 2.2 percent year-on-year in the fourth quarter of 2022, a decline from the 4.2 percent growth in the previous quarter, the Ministry of Trade and Industry noted. Seasonally adjusted, the economy expanded 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.
“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 southeast Asian country’s manufacturing sector shrank 3 percent year-on-year in the fourth quarter, a reversal from the 1.4 percent 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 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 by 2.3 percent year-on-year in the fourth quarter, slower than the 5.7 percent growth in the previous quarter.