Opening Remarks by PS Dr Beh Swan Gin for the Economic Survey of Singapore 2023

1     Good morning and welcome to this media conference.

2     Details of Singapore’s economic performance in the fourth quarter of 2023 and 2023 as a whole, as well as the economic outlook for 2024, are contained in the press release. Let me highlight a few key points.

3     In the fourth quarter of 2023, the Singapore economy expanded by 2.2 per cent on a year-on-year basis, accelerating from the 1.0 per cent growth in the previous quarter. On a quarter-on-quarter seasonally-adjusted basis, GDP grew by 1.2 per cent, slightly faster than the 1.0 per cent growth in the third quarter.

4     For 2023 as a whole, the Singapore economy expanded by 1.1 per cent, slower than the 3.8 per cent growth in 2022. GDP growth in 2023 was mainly driven by the other services, information & communications and transportation & storage sectors.

5     Let me now turn to Singapore’s economic outlook for 2024.

6     Since the last media briefing in November, Singapore’s external demand outlook for 2024 has remained largely unchanged. Growth in the advanced economies is expected to moderate in the first half of the year, mainly due to continued tight financial conditions, before recovering gradually in the second half of the year in line with an expected easing of monetary policy as inflationary pressures recede. Meanwhile, regional economies are expected to see a pickup in growth, supported in part by the turnaround in global electronics demand.

7     At the same time, downside risks in the global economy remain significant. These include an escalation or widening of the Israel-Hamas conflict or war in Ukraine; the lagged effects of monetary tightening triggering latent vulnerabilities in banking and financial systems; and idiosyncratic cost shocks disrupting the global disinflation process, thereby keeping financial conditions tight for longer.

8     Against this backdrop, Singapore’s manufacturing and trade-related sectors are expected to see a gradual pickup in growth in tandem with the improvement in global electronics demand. In particular, the electronics and precision engineering clusters are projected to rebound, especially given that the recovery in semiconductor sales globally and domestically has been stronger than expected. At the same time, the machinery, equipment & supplies segment of the wholesale trade sector will benefit from higher external demand for electronic components and telecommunications & computers.

9     Meanwhile, the continued recovery in air travel and tourism demand will support growth in Singapore’s tourism- and aviation-related sectors, including aerospace, air transport and accommodation, as well as consumer facing sectors such as retail trade and food & beverage services. Nonetheless, the pace of growth for most of these sectors is expected to moderate from that in 2023.

10     Taking into account the global and domestic economic environment, MTI is maintaining Singapore’s GDP growth forecast for 2024 at “1.0 to 3.0 per cent”.

11     Together with my panel members, I am now happy to take your questions.