Singapore maintains 1-3% GDP growth forecast for 2024 as economy expands by 2.7% in Q1

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23rd May 2024 – (Singapore) Singapore’s Gross Domestic Product (GDP) growth forecast for 2024 remains steady at a range of 1 to 3%, following the country’s 2.7% year-on-year economic expansion in the first quarter of the year. This growth aligns with the advanced estimates released by the Ministry of Trade and Industry (MTI) and surpasses the 2.2% growth recorded in the previous quarter of 2023.

Economists surveyed by Reuters had predicted a slightly lower first quarter GDP growth of 2.5%. The finance and insurance, transportation and storage, and wholesale trade sectors played a significant role in driving the Q1 growth, according to the MTI.

The finance and insurance sector experienced a 6.5% year-on-year growth, attributed to increased transaction volumes across asset classes, improved credit intermediation, and robust growth in insurance and auxiliary activities segments. The transportation and storage sector expanded by 6.8% year-on-year, driven by strong growth in air transport and increased container throughput and sea cargo handled at Singapore’s ports.

The wholesale trade sector grew by 1.5% year-on-year, surpassing the 0.2% growth in the previous quarter. The fuels and chemicals segment contributed to this growth with increased output in petroleum and petroleum products, chemicals and chemical products, and other related sub-segments.

On a quarter-on-quarter seasonally adjusted basis, Singapore’s economy showed a moderate 0.1% expansion, lower than the 1.2% growth in the preceding quarter.

Looking ahead, the MTI stated that the external economic environment has remained resilient since the Economic Survey of Singapore in February 2024. The ministry highlighted the stronger-than-expected economic growth in the United States and China in Q1 2024, driven by robust domestic and external demand. However, geopolitical tensions and conflicts in the Middle East and Ukraine pose downside risks, potentially disrupting global supply chains and commodity markets.

The MTI also provided insights into the economic outlook for major economies, stating that the US economy is expected to experience a delay in policy rate cuts due to solid performance and persistent inflation. In the Eurozone, investments and industrial activity are projected to remain weak, while consumer spending may recover in the second half of the year. China’s GDP growth is anticipated to outperform expectations, supported by government support measures and a recovery in consumption.