Singapore’s economy may slow down in 2023
2023.01.03 12:57
Singapore’s economy may slow down in 2023
Budrigannews.com – Official forecasts predicted that Singapore’s economy would expand faster in 2022, but the city-state faces significant risks in the new year as global demand declines and inflationary pressures mount.
According to preliminary data released on Tuesday by the Ministry of Trade and Industry, Singapore’s economy expanded by 3.8% in 2022, exceeding the government’s forecast of 3.5% growth and falling from 7.6% growth in 2021.
According to government data, GDP grew by 2.2% year-over-year between October and December, which is less than half the 4.2% growth seen in the third quarter. Reuters surveyed eight economists and found that 2.1% growth was anticipated.
According to MUFG analyst Jeff Ng, “It is concerning that there is a slight quarter-on-quarter fall in services.” “This showed the impact of the global slowdown on externally oriented services sectors, and that further growth from current levels will be harder to achieve in 2023.” “It is concerning that there is a slight quarter-on-quarter fall in services.”
Between October and December, seasonally adjusted GDP increased by 0.2%.
Singapore State head Lee Hsien Loong said in his New Year message on Saturday that the worldwide standpoint stays pained, which will influence the city-state’s economy. This year, the government anticipates growth of between 0.5 and 2.5 percent.
In recent months, Singapore has seen some signs of price pressures decreasing, but inflation remained high at about 5%.
In the meantime, as the country’s aging population’s rising healthcare costs necessitate additional funding, the sales tax has been increased to 8% from 7% since January 1. From 2024 on, the sales tax will be increased to 9%.
As part of an “assurance package” worth S$8 billion, the government of Singapore has pledged to provide nearly 3 million Singaporeans with at least S$700 in cash payments over the course of five years to assist them in coping with rising prices.
According to Capital Economics, the economy will likely struggle, so the Monetary Authority of Singapore won’t tighten monetary policy in 2023. To combat rising inflationary pressures, the central bank tightened its foreign exchange-based monetary policy four times last year.
“We believe that growth is likely to weaken further in the future. Capital Economics stated, “If, as we anticipate, the global economy enters a recession in 2023, exports are likely to fall further.” Domestic demand is likely to be hampered by high inflation, rising interest rates, and decreasing household savings.
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