Singapore Q4 Growth Rate 2.2%... Below Expectations Due to Manufacturing Contraction

by Cho Seulkina

Published 15 Feb.2024 10:37(KST)

Updated 15 Feb.2024 14:56(KST)

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Growth Compared to Q3, 1.1% Annual Growth

Singapore, a global hub for re-export trade, recorded an economic growth rate of 2.2% in the fourth quarter of last year, falling short of expectations. This was due to a contraction in the manufacturing sector. On an annual basis, the economy grew by 1.1%.

[Image source=AP Yonhap News]

On the 15th, the Ministry of Trade and Industry (MTI) of Singapore released the fourth quarter GDP growth rate, which stood at 2.2% year-on-year. This was below the market forecast of 2.8%, but an improvement from the 1% growth in the third quarter.

The annual growth rate was 1.1%, significantly slowing from 3.8% the previous year and slightly below the government’s initial estimate of 1.2%. Last year’s economic growth was driven by other service industries (3.9%). The information and communications and transportation sectors also continued to grow. In contrast, the key economic driver, the manufacturing sector, contracted by 4.3%.

Singapore, which has a high dependence on trade, is greatly influenced by the global economy. Major foreign media outlets assessed that Singapore was hit by a manufacturing downturn due to weakened demand from the US and China, but the construction boom helped support economic growth.

The Ministry of Trade and Industry maintained its 2024 economic growth forecast for Singapore at 1-3%. In a statement, the MTI said, "Singapore’s manufacturing and trade-related sectors are expected to show gradual growth alongside a recovery in global demand for electronic products," adding, "The continued recovery in air travel and tourism demand will also benefit Singapore’s tourism and aviation sectors." However, the ministry cited monetary tightening by major countries and geopolitical uncertainties in Ukraine and the Middle East as downside risks to the economy.