Though MAS did not put a number to that potential growth rate, most analysts believe it to be around 2% to 3%. — The Straits Times
SINGAPORE: Singapore’s economy is expected to shake off the stagnation it has suffered for most of 2023 and grow at a faster pace in 2024.
Inflation will also ease, though not without a temporary rise, partly due to the upcoming hike in the goods and services tax, the central bank said on Monday.
The Monetary Authority of Singapore (MAS) said growth should speed up, after coming in at the lower half of the 0.5% to 1.5% forecast range in 2023, as global demand for Singapore’s exports recover and interest rates cease their surge globally, helping the financial sector here.
“Gross domestic product growth is expected to improve gradually in the second half of 2024, and come in closer to its potential rate for the full year,” it said in its biannual macroeconomic review report.
MAS did not put a number to that potential growth rate, usually defined as the pace of growth that an economy can sustain over the medium term without generating excess inflation.
However, most analysts believe it to be around 2% to 3%.
Singapore’s export-led manufacturing sector has been in the doldrums since October 2022 as global demand for electronic goods slumped in response to rising prices and interest rate hikes.
Non-oil domestic exports have shrunk through the same period.
Higher global interest rates that made loans more expensive weighed down the Republic’s financial sector growth as well.
The economy avoided an outright recession as the domestic-oriented services sector and travel-related industries offset the slump in manufacturing and the weaker financial sector with their above-trend growth after the end of Covid-19 curbs, the central bank said.
Now, however, there are nascent signs of a pickup in the electronics industry both at home and abroad.
MAS noted that electronics exports from Taiwan, the global bellwether of the tech industry, have returned to growth. — The Straits Times/ANN
