(Bloomberg) – Singapore’s economy grew faster than expected in 2023, with year-end gains in manufacturing and construction and relative strength in the services sector fueling activity.
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Gross domestic product rose 1.2% for the year, according to preliminary estimates released by the Department of Trade and Industry on Tuesday. This is better than the government’s forecast of an annual expansion of about 1%.
This was a stronger-than-expected performance, with GDP in the three months to December expanding by 1.7% from the previous quarter. On a year-on-year basis, the economy expanded by 2.8% in the last quarter.
Exports reversed their first decline in 13 months to rise in November, and factory output increased in the final months of the year, boosting overall growth. Although the services sector has performed relatively well this year, Prime Minister Lee Hsien Loong tempered optimism on Sunday, warning of risks from an uncertain external environment.
“We must expect the external environment to be less favorable for our country’s security and prosperity in the coming years,” Prime Minister Lee said in his New Year’s address. “Geopolitical uncertainty will continue to weigh on the global economy.”
The government’s outlook for 2024 remains unchanged for now, as Minister Lee reiterated on Sunday the ministry’s previous forecast that economic growth would be in the 1% to 3% range.
Given that exports represent more than 1.5 times the size of the island’s economy, its prospects depend on a sustained recovery in global trade. The increase in exports in November was mainly due to the lower year-on-year basis.
–Thanks to Tomoko Sato for her assistance.
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