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Singapore’s GDP expanded by 3.8% in 2022, according to data released by the country’s Ministry of Trade and Industry on Tuesday. The government had expected the economy to grow at 3.5% in 2022, but the comparatively better performance comes from the post-pandemic recovery and rejuvenation of the tourism industry following the easing of Covid-19 travel restrictions.
However, Singapore’s GDP grew the slowest in the fourth quarter of 2022, notching up 2.2% expansion against a 4.2% growth in the third quarter. Record-high inflation and falling exports amidst slowing global trade are the main reasons behind the slowing growth rate.
Singapore GDP performance
Singapore GDP has risen 7.6% year-on-year in 2021, but the figure has now halved in 2022, indicating the headwinds faced by the city-nation.
The manufacturing sector saw a negative turnaround in the fourth quarter, contracting by 3% as compared to 1.4% growth in the third quarter, weighing heavily on the GDP output. According to the trade ministry, the sharpest decline came in the electronics, biomedicals and chemicals industries.
Separately, Singapore’s non-oil exports have dropped the sharpest in the last few months of 2022, facing the heat of a global slowdown in trade, and the volatility in China because of a resurging Covid-19 and consequent lockdowns. October saw a contraction of 6.1% and November saw a further contraction of 14.6% in non-oil exports.
The fall in external demand has put pressure on the electronics sector in Singapore. The industry accounts for the majority of the country’s manufacturing sector. Shipments of disc media products fell 45.7% in October, while personal computer parts fell 31.6% and semiconductors fell 11.1%.
Meanwhile, Singapore’s core consumer inflation touched 5.1% in November, unchanged from October. “We expect inflation in Singapore to remain relatively elevated with core CPI ranging between 4-5% for 2023,” Nikko Asset Management said in its Singapore Outlook for 2023, which means inflationary pressures are here to stay.
On the other hand, the International Monetary Fund expects Singapore to grow at 3.0% in 2023 in the face of a global slowdown in trade.
Even though GDP expansion contracted relative to 2021, Singapore’s equity market remained in the green in a sea of red across the globe. The Straits Times Index moved up 4.09% in 2022 and is among the top-performing markets in Asia. India’s BSE Sensex ranked top in Asia notching up 4.44% growth.
– reporting by Pritam Biswas, edited by Sumeet Gaikwad.
