Singapore’s economic outlook for 2023 has been revised down to a growth of 1.1%, a slight dip from the initial estimate of 1.2%, according to data from the Ministry of Trade and Industry (MTI) released on February 14, 2023. This moderation follows the 3.8% expansion recorded in 2022.

The fourth-quarter gross domestic product (GDP) growth was adjusted to 2.2% year-on-year, falling short of the advance estimate of 2.8%. Despite this, it signifies an acceleration from the third quarter’s 1% expansion.

The revised data reveals that the manufacturing sector, a crucial driver of Singapore’s economy, contracted by 4.3% in 2023, reversing the 2.7% growth observed in 2022. In contrast, the construction sector demonstrated improvement, growing by 5.2%, up from the 4.6% expansion in the previous year.

The overall growth in 2023 was primarily fueled by a 3.9% year-on-year growth in “other services industries.” The information and communications sector, along with transportation and storage, also played a role in driving growth.

Despite the economic challenges, the MTI has maintained its 2024 growth forecast range at 1 to 3%. It notes that the external demand outlook remains relatively stable, with growth in advanced economies expected to ease in the first half of 2024 due to tight financial conditions, followed by a recovery supported by easing monetary policies as inflationary pressures subside.

Analysts, such as RHB acting group chief economist Barnabas Gan, point to signs of strength in US and ASEAN indicators, particularly in labor, manufacturing, and consumption numbers toward the end of 2023.