Singapore: GDP growth records quickest expansion since Q4 2022 in Q4 2023
A downwardly revised second release showed that GDP growth rose to 2.2% year on year in the fourth quarter, from 1.0% in the third quarter. Q4’s reading marked the strongest growth since Q4 2022 but was weaker than the 2.8% expansion reported in the first estimate. On a seasonally adjusted quarter-on-quarter basis, economic growth picked up to 1.2% in Q4, from the previous period’s 1.0% expansion.
Revised data showed that the goods-producing sector was the chief driver of Q4’s improvement: The industrial sector grew 1.9% year on year in the fourth quarter, contrasting the third quarter’s 3.5% decrease and marking the best reading since Q2 2022. Moreover, goods exports bounced back in Q4, pointing to less downbeat external demand, while services exports fell less than in Q3. On the flipside, the services sector lost steam, growing 2.0% in Q4 (Q3: +2.3% yoy).
United Overseas Bank analysts Jester Koh and Alvin Liew commented on the outlook:
“External demand from the advanced economies is likely to soften in 1H24 on tight financial conditions before recovering gradually in line with an expected easing of monetary policy as inflationary pressures recedes. Singapore’s manufacturing and trade-related sectors are expected to see a gradual pickup in growth in tandem with the turnaround in global electronics demand while continued recovery in air travel and tourism demand will support consumer-facing sectors although the pace of growth is projected to soften from that seen in 2023.”