Singapore Maintains 2024 GDP Growth Forecast Amid Economic Fluctuations

Singapore has maintained its 2024 economic growth outlook at 1% to 3%, despite facing global risks such as geopolitical tensions and diverging monetary policies. The Ministry of Trade and Industry (MTI) confirmed that the economy expanded by 0.1% on a quarter-on-quarter seasonally adjusted basis in Q1 2024, marking the slowest pace in a year. Year-on-year, the economy grew by 2.7%, supported by strong tourism and services sectors, though it fell short of economists' median forecast of 3%.

MTI attributed the growth to stronger-than-expected economic performances in the United States and China, driven by robust domestic and external demand. The ministry also noted the positive impact of the global electronics recovery, especially in AI-related chips, on regional economies such as South Korea and Taiwan. However, it warned of potential downside risks, including geopolitical tensions in the Middle East and Ukraine, which could disrupt global supply chains and commodity markets.

Enterprise Singapore reported a 3.4% decline in non-oil domestic exports (Nodx) in Q1 2024, following a 1.4% decline in the previous quarter. Despite this, a recovery in electronics demand is anticipated in the second half of the year, driven by consumer devices and AI servers. The International Monetary Fund (IMF) projects global economic activity to grow by 3.2% in 2024, with key trade partners such as China, the United States, Europe, and ASEAN expected to see growth.

The Monetary Authority of Singapore (MAS) deemed current monetary policy settings appropriate and left them unchanged during its April review, with the next review scheduled for July. Despite the challenges, Singapore expects to benefit from improving growth prospects in the US and China, as well as robust travel and tourism demand.