SINGAPORE — The Ministry of Trade and Industry (MTI) has announced that the economy grew by 3.6 per cent in 2022, slightly lower than the previous estimate of 3.8 per cent and that it holds the GDP growth forecast for 2023 at 0.5 per cent to 2.5 per cent.
In the fourth quarter of 2022, the economy expanded by 2.1 per cent from the previous year, lower than the earlier projection of 2.2 per cent and the 2.3 per cent forecast by analysts. However, the estimate for 2021 growth was raised to 8.9 per cent from 7.6 per cent due to data updates and revisions.
The main drivers of GDP growth in 2022 were wholesale trade, manufacturing, and other services.
This year, the air transport, accommodation, and arts, entertainment, and recreation sectors are expected to lead the growth, particularly due to the easing of China’s border restrictions.
The aerospace sector is also expected to benefit from the improved outlook for global air travel.
However, the global slowdown will keep the pace of expansion limited this year, as uncertainties in the global economy remain, including higher interest rates and geopolitical tensions.
The outlook for outward-oriented sectors such as semiconductors and precision engineering is weak, while growth in wholesale trade, water transport, and finance and insurance sectors will be dampened by the slowdown in major external economies.
In 2022, the manufacturing sector grew by 2.5 per cent, slower than the 13.3 per cent growth in 2021, while the construction sector posted a growth of 6.7 per cent. The services-producing industries expanded by 4.8 per cent, driven by the wholesale trade, other services, and information and communications sectors.
Enterprise Singapore also announced in a separate release that non-oil domestic exports (NODX) rose by only 3 per cent in 2022, a sharp decline from the 12.1 per cent gain in 2021, and maintained its 2023 forecast for (NODX) of no growth or a contraction of up to 2 per cent.
In line with the slowing growth momentum, inflation in Singapore has also ceased to accelerate.
According to the Economic Survey of Singapore 2022 report, headline inflation rose to 6.6 per cent year on year in the fourth quarter, down from the 7.3 per cent peak in the third quarter.
The Monetary Authority of Singapore’s Chief Economist stated that the current policy stance was appropriate and would continue to slow inflation momentum, with the next policy review scheduled for April 2023.
Headline inflation is expected to average 5.5 per cent to 6.5 per cent for 2023 as a whole.