Singapore GDP Growth Rate Exceeds 2022 Forecasts, Records 3.8% Growth
The services sector helped to boost the Singapore GDP growth rate to 3.8% in 2022, beating forecasts. However, growth in the fourth quarter was slower than expected.
Growth in the manufacturing sector was not as optimistic as analysts expected. Manufacturing experienced a growth of only 3% in Q4 (year-on-year). The softer global demand for computer chip exports and other products was also responsible for causing the surge in interest rates and inflation.
2023 May Be “A Tough Year”
Some analysts are predicting that 2023 may be a “tough year” on the international front because of the ongoing conflict between Russia and Ukraine. Other factors impacting the cloudy outlook include China’s COVID-19 recovery. The United States and European Union could also enter into a recession.
If the economy continues to struggle, it is unlikely the Monetary Authority of Singapore will tighten its 2023 monetary policy. Last year, the central bank tightened its monetary policy (exchange-based) four times in an effort to combat rampant inflation. If exports continue on the decline in 2023, the economy could go into recession.
Manufacturing may look sluggish at the moment, and regional trade may not be strong. But analysts are optimistic international tourism and trade could make a strong recovery, especially with China relaxing its COVID-19 restrictions.
China opening its borders will be advantageous to the Singapore services sector. That should help to balance the forecasted economic risks for the 2023 Singapore GDP growth rate.