Opening Remarks by PS Mr Gabriel Lim for Economic Survey of Singapore 2022

1 Good morning and welcome to this media conference.

2 Details of Singapore’s economic performance for the fourth quarter and the whole of 2022, as well as the economic outlook for 2023, are contained in the press release. Let me highlight a few key points.

3 In the fourth quarter of 2022, the Singapore economy expanded by 2.1 per cent on a year-on-year basis, and 0.1 per cent on a quarter-on-quarter seasonally-adjusted basis. For 2022 as a whole, the economy grew by 3.6 per cent, slower than the 8.9 per cent growth in 2021. The 2021 growth rate has been revised upwards from the 7.6 per cent released in February last year to account for data updates and revisions from various sources, including the annual sectoral surveys carried out throughout last year. GDP growth in 2022 was mainly driven by the wholesale trade, manufacturing and other services sectors.

4 Let me now turn to the economic outlook for 2023.

5 Since the last media briefing in November, Singapore’s external demand outlook for 2023 has improved slightly. In particular, growth in China is projected to pick up in tandem with the faster-than-expected easing of its COVID-19 restrictions. This has in turn led to improvements in the growth outlook of regional economies. Meanwhile, the growth outlook of the US and Eurozone economies remains weak amidst tighter financial conditions, which will weigh on consumption and investment spending in these economies.

6 At the same time, uncertainties in the global economy remain. These include the impact of tighter financial conditions across many advanced economies on global growth, as well as the risk of further escalations in the war in Ukraine and geopolitical tensions among major global powers. Details of these risks are contained in the press release.

7 Against this backdrop, the growth outlook for aviation- and tourism-related sectors of the Singapore economy has improved, as the ongoing recovery in international air travel and inbound tourism is expected to accelerate following the faster-than-expected relaxation of China’s border restrictions. These sectors include air transport, accommodation and arts, entertainment & recreation. The output of the aerospace segment is also expected to be bolstered by the improved outlook for air travel.

8 On the other hand, the growth outlook for other outward-oriented sectors remains weak given the broader slowdown in the global economy. For example, the semiconductors segment of the electronics cluster is expected to be negatively affected by weaker global semiconductor demand, while the precision engineering cluster is projected to be weighed down by a cutback in capital spending by semiconductor manufacturers. At the same time, growth in the wholesale trade, water transport and finance & insurance sectors will be dampened by the slowdown in major external economies.

9 Taking into account the global and domestic economic environment, MTI has decided to maintain Singapore’s GDP growth forecast for 2023 at “0.5 to 2.5 per cent”.

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