Singapore Adjusts GDP data to lower hopes for 2023
2023.02.13 01:37
Singapore Adjusts GDP data to lower hopes for 2023
By Ray Johnson
Budrigannews.com – Official data released on Monday indicated that Singapore’s economy expanded slightly less than initially anticipated in the fourth quarter of last year. The government maintained its projection for annual growth of 0.5 to 2.5 percent for this year.
The Ministry of Trade and Industry (MTI) reported that GDP increased by 2.1% year-over-year in the fourth quarter. This was slightly lower than the government’s advance estimate of 2.2% growth because of slightly weaker growth in the construction and service sectors.
“The outlook for Singapore’s external demand in 2023 has slightly improved.” According to Gabriel Lim, permanent secretary for trade and industry, “in particular, growth in China is projected to pick up in tandem with the faster-than-expected easing of its COVID-19 restrictions.”
He added, “Amidst tighter financial conditions, the growth outlook of the U.S. and Eurozone economies remains weak, which will weigh on consumption and investment spending in these economies.”
GDP increased 3.6% over the entire year, exceeding the initial estimate of 3.8%.
Analysts said that China’s reopening will help some service industries this year, while manufacturing, especially electronics, will probably slow growth in the short term.
In recent months, Singapore has experienced some slight signs of price pressures decreasing, but inflation remained elevated at approximately 5%.
Edward Robinson, Deputy Managing Director at the Monetary Authority of Singapore, stated that the Monetary Authority of Singapore’s current monetary policy stance remains appropriate. April is anticipated for the subsequent policy meeting.
“Related to the labor market conditions both overseas in our key export markets, as well as domestically,” Robinson stated, “one of the important sources of inflation that we will be monitoring and analysing quite carefully through this year is related to the conditions of the labor market.”
He also mentioned that, in line with expectations, headline and core inflation have shown a slight decline in momentum quarter to quarter.
According to OCBC’s head of treasury research and strategy Selena Ling, “Inflation is likely to subside gradually in 2H23, but likely in fits and starts amid the volatile commodity prices, including food and energy.”
She added, “Looks like the window for a tightening remains open if core inflation remains very sticky on the downside.”
In the meantime, on January 1, the country’s sales tax was increased to 8% from 7% in an effort to raise more money to pay for more expensive healthcare for its aging population. From 2024 on, the sales tax will be increased to 9%.
Singapore had lifted most of its COVID-19 restrictions in April of last year, and numerous international events have returned to the city-state, bringing in tourists and businesses. Beginning on Monday, the remaining restrictions will be eased.
By 2024, the Asian financial center anticipates that tourism will return to pre-pandemic levels.
