Economy
MTI: Singapore’s economy grows by 4.1% in Q3 2024
Singapore’s economy picked up pace in Q3 2024, growing by 4.1% year-on-year, according to advance estimates from the Ministry of Trade and Industry issued on 14 October. On a quarter-on-quarter basis, the economy expanded by 2.1%, surpassing the 0.4% growth in Q2. The recovery was attributed to the manufacturing sector, which registered a 7.5% growth in Q3 after previous contractions.
SINGAPORE: Singapore’s economy gained momentum in the third quarter of 2024, growing by 4.1 % year-on-year, according to advance estimates from the Ministry of Trade and Industry (MTI) released on 14 October.
This represents a significant increase from the 2.9 % growth recorded in the second quarter.
In Q2 2024, the economy expanded by 2.9% year-on-year, slightly lower than the 3.0% growth seen in Q1.
Separately, Singapore’s central bank The Monetary Authority of Singapore (MAS) announced on the same day that it will maintain its current monetary policy settings, as inflation shows signs of easing and economic growth continues to strengthen.
The recovery was attributed to the manufacturing sector, which expanded by 7.5 per cent in Q3, a notable rebound following contractions in the previous two quarters.
Other sectors, such as construction and finance, also saw positive contributions to the economy.
On a quarter-on-quarter seasonally adjusted basis, the economy grew by 2.1 per cent, up from 0.4 per cent in Q2 2024.
Advance gross domestic product (GDP) estimates are based on data from the first two months of the quarter, serving as an early indication of Singapore’s economic performance.
These estimates may be revised as more comprehensive data becomes available later in the year.
In August, Singapore had adjusted its GDP growth forecast for 2024 to a range of 2 per cent to 3 per cent, following stronger-than-expected economic performance in the first half of the year.
Previously, the MTI had projected GDP growth between 1 per cent and 3 per cent.
Manufacturing drives recovery
The manufacturing sector led Singapore’s recovery in Q3, growing by 7.5 per cent year-on-year.
This marked a turnaround from the 1.1 per cent contraction in Q2 and the 1.5 per cent decline in Q1. MTI reported that growth was broad-based across all manufacturing clusters except for the biomedical manufacturing cluster.
On a quarter-on-quarter basis, manufacturing grew by 9.9 per cent, a sharp improvement from the 1.2 per cent contraction in Q2. The continued expansion in manufacturing is expected to remain a key driver for overall economic growth.
The construction sector grew by 3.1 per cent in Q3 2024, although this was slower than the 4.8 per cent growth recorded in Q2. This sector’s growth was mainly attributed to an increase in public sector construction output.
On a quarter-on-quarter basis, however, construction growth was flat, moderating from the 3.4 per cent expansion seen in the previous quarter.
Mixed performance in other sectors
The group of sectors comprising wholesale and retail trade, transportation, and storage collectively grew by 3.5 per cent in Q3, slightly lower than the 3.9 per cent expansion in Q2.
Growth within this group was mainly supported by the transportation and storage sectors, with water and air transport performing particularly well.
Wholesale trade also expanded, led by the machinery, equipment, and supplies segment. However, the retail trade sector continued to face challenges, contributing to a more subdued performance.
Meanwhile, the group of sectors including information and communications, finance and insurance, and professional services posted a 4.3 per cent year-on-year growth in Q3, down from 5.3 per cent in Q2.
In the information and communications sector, IT and information services led growth, while the professional services sector benefited from an expansion in activities related to head offices and business representative offices.
The finance and insurance sector saw broad-based growth, particularly in banking and financial services.
On a quarter-on-quarter seasonally adjusted basis, these sectors grew by 1.6 per cent, an improvement over the 1.2 per cent growth in Q2.
Accommodation and food services show steady growth
Sectors related to accommodation, food services, real estate, and administrative support services grew by 1 per cent year-on-year in Q3, maintaining the same pace as the previous quarter.
MTI attributed growth within this group to the accommodation sector, which benefitted from a recovery in international visitor arrivals.
On a quarter-on-quarter basis, these sectors collectively expanded by 0.8 per cent, reversing the 1.3 per cent contraction seen in Q2.
The preliminary GDP estimates for Q3 2024, which will include further details on inflation, employment, and productivity, will be released as part of the Economic Survey of Singapore next month.
The broader economic outlook for Singapore in 2024 remains positive, with growth being driven by key sectors like manufacturing and finance.
However, challenges persist in areas such as retail trade, which may face headwinds in the coming months.
