Singapore’s economy avoided recession last year, but Prime Minister Lee Hsien Loong warned of a “challenging” international environment weighing on growth and security.
In his New Year’s message, Prime Minister Lee said gross domestic product (GDP) expanded by 1.2%, compared with the Trade Ministry’s forecast of about 1% in November. He reiterated official forecasts of 1-3% growth in 2024.
Mr Li said 2023 will be a “challenging year” as tensions between the US and China remain high and the war in Ukraine has reached a “strategic impasse with no resolution in sight”.
He pointed to global “disgust and anger” at the human suffering in the Israel-Hamas conflict.
“We must expect the external environment to become unfavorable for our country’s security and prosperity in the coming years,” Lee said. “Geopolitical uncertainty will continue to weigh on the global economy.”
Given that exports represent more than one time the size of the city-state’s economy, Singapore’s prospects depend on a sustained recovery in global trade. Overseas shipments increased in November for the first time in 14 months, but the main reason for the increase was a lower year-on-year comparison.
Meanwhile, Saudi Arabia’s Public Investment Fund emerged as the world’s most active sovereign investor last year, increasing trading activity even as global peers such as Singapore’s GIC and Temasek cut spending.
According to research consultancy Global SWF, PIF invested US$31.6 billion last year. This is more than the US$20.7 billion (HK$155.25 billion) it invested in 2022, and contrasts with a broader trend in which state-owned investors around the world invested US$124.7 billion, about a fifth less than the previous year. This was a significant increase.
In other news, South Korean exports continued to rise last month, helped by rising demand in the United States, which overtook China as its largest market for the first time in 20 years.
Data released yesterday showed that global shipments, adjusted for differences in business days, rose 14.5% year-on-year. Major exports rose 5.1%, compared with economists’ expectations for a 3.7% increase. Overall imports decreased by 10.8%, resulting in a trade surplus of $4.5 billion.
bloomberg