Opening Remarks by PS Dr Beh Swan Gin for the Third Quarter 2024 Economic Survey of Singapore

1  Good morning and welcome to this media conference.

2  You would have seen and reported on the press release that was distributed to you earlier. Let me highlight a few key points.

3  In the third quarter of 2024, the Singapore economy grew by 5.4 per cent on a year-on-year basis. This brought GDP growth in the first three quarters of the year to 3.8 per cent year-on-year. 

4  Growth in the third quarter was primarily driven by the manufacturing, wholesale trade and finance & insurance sectors, which were bolstered in part by the upturn in the global electronics cycle. 

Economic Outlook for 2024

5  For the rest of the year, MTI expects Singapore’s external demand outlook to remain resilient. This, coupled with the ongoing recovery in the global electronics demand, should support growth in Singapore’s manufacturing sector and outward-oriented services sectors such as the wholesale trade. However, the outlook for the tourism-related and consumer-facing sectors such as the accommodation, retail and food & beverage services sectors has weakened due to both sustained local travel outwards as well as a slower-than-expected recovery in international visitor arrivals and sluggish tourist spending.

6  Taking into account, however, the better-than-expected performance of the Singapore economy in the first three quarters of the year, as well as the latest global and domestic situations, MTI has upgraded the GDP growth forecast for 2024 to “around 3.5 per cent”, from the earlier “2.0 to 3.0 per cent”.

Economic Outlook for 2025

7  Now, turning to 2025, overall GDP growth in Singapore’s key trading partners is expected to ease slightly from 2024’s level. In particular, GDP growth in the US is likely to moderate. As labour market conditions continue to ease, this will lead to a slowdown in consumption growth. In contrast, GDP growth in the Eurozone is likely to pick up asa result of monetary policy becoming more accommodative, which will lead to a gradual recovery in investments and stronger consumption growth. 

8  In Asia, China’s GDP growth is projected to moderate in line with weaker exports growth due to tariff hikes that have already been announced. Meanwhile, key Southeast Asian economies should see steady growth, driven in part by the upswing in global electronics demand. 

9  Nonetheless, global economic uncertainties have increased, including uncertainty over the policies of the incoming US administration. These risks are detailed in the press release. 

10  Against this backdrop, the growth outlook of the manufacturing sector and trade-related services sectors in Singapore remains positive. The electronics cluster is projected to continue to expand, supported by strong global semiconductor demand. This will have positive spillover effects tothe precision engineering cluster and the wholesale trade sector. At the same time, the firm order books in the aerospace and marine & offshore engineering segments should drive growth in the transport engineering cluster.

11  Similarly, outward-oriented services sectors such as the information & communications and finance & insurance sectors are projected to register healthy growth. Meanwhile, tourism-related sectors like the accommodation sector will benefit from the continued recovery in international visitor arrivals. On the other hand, growth in consumer-facing sectors such as the retail and food & beverage services sectors is likely to remain weighed down by increased local outbound travel.

12  Taking these factors into account, and barring the materialisation of downside risks, the Singapore economy is expected to grow by “1.0 to 3.0 per cent” in 2025. Given heightened uncertainties in the global economy, MTI will continue to monitor developments closely in the year ahead and adjust the forecast over the course of the year if necessary.

13  Together with my panel members, Ms Yong Yik Wei and Mr Edward Robinson, I am now happy totake your questions.