Singapore upgrades full-year GDP growth forecast to 2-3%
Trade ministry says manufacturing sector will recover gradually in second half
The city-state on Tuesday upgraded its full-year economic growth projection for 2024 to 2% to 3% from the previous range of 1% to 3%, projecting a gradual recovery in the manufacturing sector.
“Singapore’s manufacturing sector is expected to see a gradual recovery in the second half of the year,” the Trade and Industry Ministry said in a news release. “In particular, the electronics cluster is projected to recover more strongly, supported by robust demand for smartphones, PC and AI-related chips.”
According to official data released on the same day, Singapore’s gross domestic product grew 2.9% in the April-June quarter from a year earlier, unchanged from the preliminary estimate.
The latest gross domestic product figure, which lags the 3.0% expansion in the first quarter, took into account updates and revisions to data from various sources made by the ministry after the preliminary estimate was released last month.
Singapore’s export-driven manufacturing sector contracted 1% from a year earlier, slightly better than the 1.7% contraction in the previous quarter, lifting the Southeast Asian financial hub’s hopes for emerging from a season of weak trade figures.
But officials warned of headwinds on the horizon.
“For the rest of 2024, U.S.’ GDP growth is expected to ease gradually as consumption growth slows in tandem with weakening labor market conditions, even as investment growth is likely to remain supported by AI-related investments,” the ministry said in a statement on Tuesday.
U.S. and Asian markets plunged earlier this month over mounting worries of a U.S. recession after American labor data showed weak hiring and rising unemployment. Jittery investors feared the U.S. Federal Reserve has kept interest rates high for too long, hurting businesses needing access to cash and beckoning a downturn that could have a ripple effect worldwide.
The U.S. was Singapore’s second-largest trading partner after China in 2023, with trade both ways totaling 129.1 billion Singapore dollars ($97.5 billion) last year, the city-state’s Statistics Department reports.
“We’ve built in a gradual moderation in U.S. growth performance in the second half — for the year,” Gabriel Lim, the permanent secretary at the Trade Ministry, said during an online briefing on Tuesday. “I think while we’re watching some signs of a gradual slowdown, but at the same time, I wouldn’t count out the U.S. economy anytime.”
Elsewhere, output in the more domestically oriented services sector was up 3.7%, while the construction industry expanded 3.8%, according to official data.
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