Singapore’s economy grew less than expected last year, the government said on Thursday, warning that geopolitical risks will continue to pose headwinds this year.
The city-state’s economic performance is often seen as a barometer of the global environment due to its dependence on international trade.
Last year’s growth rate of 1.1% announced by the Ministry of Trade fell short of the 1.2% announced by Prime Minister Lee Hsien Loong on New Year’s Eve, based on advance forecasts.
It was the third consecutive year of growth since the 2020 recession caused by the coronavirus pandemic, but slower than the 3.8% in 2022 and 8.9% in 2021.
According to the ministry, this year’s growth forecast remains unchanged at 1.0-3.0%.
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Last year’s weak performance was due to weak global demand for Singapore’s exports, with major manufacturing contracting by 4.3%, a reversal from 2.7% growth a year earlier.
“Singapore’s external demand outlook for 2024 remains largely unchanged,” the Ministry of Trade said in a statement.
Economic growth in major export markets, including the United States and the euro area, is expected to slow in the first half of the year, primarily due to continued tight financial conditions, before adjusting to expected monetary policy easing as inflationary pressures recede. “We expect it to gradually recover,” he added.
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The statement said China’s economy is “expected to remain lackluster in the first half of this year due to slowing growth in domestic consumption and exports due to the slump in the real estate market.”
It warned that downside risks to the global economy “remain significant” and that global supply chains could be disrupted by the escalation of the Israel-Hamas conflict and the war in Ukraine.
The ministry said the delayed impact of bad weather and high interest rates could also weaken the momentum of the global economic recovery.
MBA/dan