Singapore’s economic growth slows as global headwinds mount

Singapore’s economy grew by 3.8 per cent last year – more than expected but much slower than the 7.6 per cent rise enjoyed in 2021

Elevated interest rates, declining household savings, high inflation and falling exports are all expected to hurt growth in the year ahead

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People take photos at Singapore’s Marina Bay last month. The city state’s economic performance is often seen as a useful barometer because of its reliance on trade with the rest of the world. Photo: Xinhua

Published: 3:02pm, 3 Jan 2023

Singapore’s economy grew more than expected last year but much slower than in 2021, official data showed on Tuesday, as analysts warned of weaker growth ahead owing to an expected recession in key markets.

While the 3.8 per cent on-year expansion was welcome, it was weighed by a 3 per cent contraction in the key manufacturing sector in the final three months.

Growth in the fourth quarter came in at 2.2 per cent, sharply down from 4.2 per cent in July-September, according to advance estimates by the trade ministry.

Exports for computer chips and other products have been hit by softer global demand caused by surging inflation and sharp increases in interest rates.

Shoppers browse merchandise in a shopping centre on Orchard Road in Singapore last month. Photo: Reuters

The city state’s economic performance is often seen as a useful barometer of the global environment because of its reliance on trade with the rest of the world.

Last year’s growth beat the 3.5 per cent expected by the government but was half the 7.6 per cent rise enjoyed in 2021.