Private sector economists have revised down their growth projection for Singapore’s economy in 2023 to 1 percent, marking a decrease from the earlier estimate of 1.4 percent made in June.
The primary concern cited for this revision is a deceleration in the external growth environment. Additionally, economists have raised concerns about rising inflationary pressures and a slowdown in economic growth within China.
These findings were disclosed in the latest survey of professional forecasters conducted by the Monetary Authority of Singapore (MAS) on Wednesday, September 6. A total of 22 economists and analysts participated in the survey.
The newly adjusted growth estimate of 1 percent aligns with the Ministry of Trade and Industry’s (MTI) GDP projection range of 0.5 to 1.5 percent for the year. This range was narrowed from the previous forecast of 0.5 to 2.5 percent. In August, MTI expressed concerns about a “weak” external demand outlook for the remainder of the year.
According to the MAS survey, the manufacturing sector, a crucial economic indicator, is anticipated to contract by 4.4 percent in 2023. This is a less favorable outlook compared to the previous forecast of a 1.3 percent contraction.
Singapore’s manufacturing output, responsible for approximately one-fifth of the nation’s gross domestic product, has been in a contraction phase for about a year due to subdued global demand, as indicated by the Purchasing Managers’ Index.
However, there have been indications of improvement, with a recent moderation in the pace of contraction.
Economists participating in the MAS survey foresee a 1 percent year-on-year GDP growth for the third quarter of 2023, surpassing the 0.5 percent year-on-year expansion recorded in the second quarter.
