The Ministry of Trade & Industry maintained its 2024 economic growth forecast for the Singapore economy on Thursday, following lackluster annual growth in 2023.

The Ministry reiterated its guidance for Singapore’s gross domestic product in 2024 at between 1.0% and 3.0% growth. In 2023, the economy expanded by 1.1%, lower than 2022’s 3.8% growth.  

Singapore’s external demand outlook for 2024 has remained largely unchanged, the Ministry said.  

“Growth in the advanced economies is expected to moderate in the first half of the year, mainly due to continued tight financial conditions, before recovering gradually in line with an expected easing of monetary policy as inflationary pressures recede,” the Ministry said. 

“Meanwhile, regional economies are expected to see a pickup in growth in the year ahead, supported in part by the turnaround in global electronics demand.” 

US, China and Southeast Asian neighbours 

The US and China will be closely watched throughout the year as they are two of Singapore’s most important trading partners.  

“In the US, GDP growth is expected to continue to ease in the coming quarters amidst continued tight financial conditions, before picking up later in the year alongside a loosening of monetary policy, which will support a recovery in investment growth,” the Ministry said.  

Meanwhile, China’s GDP growth is expected to remain “lackluster” in the first half of this year. This is due to sluggish domestic consumption and export growth alongside weak property market conditions, the Ministry said.  

“Growth is likely to recover gradually in the second half in line with improvements in consumer sentiments and global demand.” 

More regionally, Malaysia, which is also one of Singapore’s top trading partners, and Thailand are likely to see support from continued recovery in tourist arrivals as well as an anticipated pickup in global electronics demand.  

Electronics demand to boost growth 

Increased demand for electronics will likely boost Singapore’s manufacturing and trade-related sectors. This would be welcomed following a poor performance for the manufacturing sector in 2023, which shrunk 4.3% from the year before.  

Singapore’s economy heavily relies on its manufacturing base, particularly in electronics and technology products. These sectors are significant contributors to the city-state’s GDP and employment. 

“In particular, the electronics and precision engineering clusters within the manufacturing sector are projected to rebound, especially given that the recovery in semiconductor sales globally and domestically has been stronger than expected,” the Ministry said.  

“At the same time, the machinery, equipment & supplies segment of the wholesale trade sector will benefit from higher external demand for electronic components and telecommunications & computers.”