Singapore Outpaces Expectations With Strong Q4 Growth In 2023

Singapore’s economy accelerated in Q4 2023, outperforming economists’ predictions largely due to the progress in the construction and manufacturing sectors.

What Happened: As reported by Reuters, Singapore’s economy grew by 2.8% year-on-year during the fourth quarter, with the construction and manufacturing sectors playing a significant role in this growth.

This figure outshone the 1% increase recorded in Q3 2023. Throughout 2023, the economy expanded by 1.2%, a decrease from the 3.6% growth in 2022.

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OCBC’s Selena Ling and Maybank’s Chua Hak Bin, both economists, acknowledged that the Q4 growth exceeded their forecasts. Ling had predicted a 1.8% expansion, and Chua had forecasted a 2.5% growth. “Green shoots are sprouting in exports and manufacturing, brightening the outlook for 2024,” Chua commented, anticipating a GDP growth of 2.2% in 2024. Ling’s 2024 forecast aligns with the trade ministry’s projections, predicting growth between 1% and 3%.

The GDP grew 1.7% on a quarter-on-quarter seasonally adjusted basis in the October-December period, an improvement on the 1.3% expansion in the third quarter. The Monetary Authority of Singapore (MAS) is expected to review its monetary policy no later than Jan. 29.

Why It Matters: This encouraging Q4 growth comes on the heels of Singapore’s impressive economic performance in 2021. Singapore’s economy registered a 7.2% growth in 2021, its highest in over a decade, bouncing back from a 5.4% contraction due to the pandemic in the previous year. The news of this robust growth positively impacted U.S.-listed companies in Singapore, with shares of companies such as CapitaLand Ascendas REIT ACDSF, Keppel Corp Ltd KPELY, and Singapore Telecommunications Ltd SGAPY going up.

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