Singapore’s GDP grows by 0.4% in Q1 2023, global economic outlook darkens

2023-05-25 04:36:15

By Le Figaro with AFP

Published on 05/25/2023 at 06:36

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Singapore maintained its growth forecast for the whole of 2023 between 0.5% and 2.5%. imtmphoto / stock.adobe.com

Singapore posted a growth in its gross domestic product of 0.4% in the first quarter, better than expected, according to statistics released Thursday, but warns that the global economic outlook is darkening. The economic performance of the Southeast Asian city-state is considered a good barometer of the international economic trend because of his dependence on exchanges with the rest of the world.

Singapore’s economy grew by 0.4% year on year for the January-March period, less than the 2.1% growth recorded in the previous quarter, but at a faster pace than the preliminary figures published by the Ministry of Commerce ( MTI) last month. Compared to the previous quarter, Singapore’s economy contracted by 0.4%.

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The ministry maintained its growth forecast for the whole of 2023 between 0.5% and 2.5%, noting that it expected GDP growth in the middle of the range. “Downside risks to the global economy have increased“, he warned however. He notes in a statement:a sharper-than-expected tightening of global financial conditions“, as well as'”an escalation of the war in Ukraine and geopolitical tensions between the great powers».

Singapore’s trade volume is more than three times its GDP and any slowdown in global demand is reflected in its trade and activity statistics, notes Song Seng Wun, regional economist for the private bank CIMB.

Singapore is likea canary in a coal minehe says, referring to the practice of miners who once brought along a canary to detect gas leaks. The manufacturing sector, which includes the key semiconductor industry, contracted 5.6% in the first quarter, following a 2.6% decline in the last quarter of 2022.

«The international demand outlook for Singapore has weakened for the rest of the year“, noted the MTI in a press release. “In addition to the expected slowdown in developed economies, the bear cycle for electronics is likely to be deeper and more prolonged than initially expected.».

On the other hand, tourism and aviation show optimistic prospects, notes the ministry. While expecting a strong economic recovery in China from the Covid-related restrictions, the MTI warned that the benefits of this trend for Singapore “should be weak».

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