SINGAPORE: Singapore’s financial system grew greater than anticipated final 12 months however a lot slower than in 2021, official knowledge confirmed Tuesday, as analysts warned of weaker progress forward owing to an anticipated recession in key markets.
Whereas the three.8 p.c on-year growth was welcome, it was weighed by a 3.0 p.c contraction in the important thing manufacturing sector within the remaining three months.
Progress within the fourth quarter got here in at 2.2 p.c, sharply down from 4.2 p.c in July-September, in keeping with advance estimates by the commerce ministry.
Exports for pc chips and different merchandise have been hit by softer world demand brought on by surging inflation and sharp will increase in rates of interest.
The town-state’s financial efficiency is commonly seen as a helpful barometer of the worldwide atmosphere due to its reliance on commerce with the remainder of the world.
Final 12 months’s progress beat the three.5 p.c anticipated by the federal government however was half the 7.6 p.c rise loved in 2021.
“Whereas the slight outperformance suggests some resilience in financial actions for now, the general development stays on the draw back,” Yeap Jun Rong, market analyst at on-line buying and selling agency IG, mentioned in a be aware.
Analysis home Capital Economics mentioned it expects exports to fall additional on expectations the worldwide financial system would enter a recession this 12 months.
“Elevated rates of interest, declining family financial savings and excessive inflation are more likely to drag on home demand,” it added.
Tune Seng Wun, a regional economist with CIMB Personal Banking, advised AFP: “The Singapore financial system, although confronted headwinds, did nicely sufficient. However the outlook is cautious provided that we’re such a trade-dependent financial system.”
Prime Minister Lee Hsien Loong warned in his New Yr’s message that progress this 12 months is predicted to ease to 0.5-2.5 p.c.
“The worldwide outlook stays troubled. The Russia-Ukraine battle continues, with no good final result in sight,” he mentioned.
“US-China tensions are more likely to persist. How rapidly China recovers from Covid-19 stays to be seen, whereas the US and EU could nicely enter recession. Our financial system shall be affected.”
Whereas the three.8 p.c on-year growth was welcome, it was weighed by a 3.0 p.c contraction in the important thing manufacturing sector within the remaining three months.
Progress within the fourth quarter got here in at 2.2 p.c, sharply down from 4.2 p.c in July-September, in keeping with advance estimates by the commerce ministry.
Exports for pc chips and different merchandise have been hit by softer world demand brought on by surging inflation and sharp will increase in rates of interest.
The town-state’s financial efficiency is commonly seen as a helpful barometer of the worldwide atmosphere due to its reliance on commerce with the remainder of the world.
Final 12 months’s progress beat the three.5 p.c anticipated by the federal government however was half the 7.6 p.c rise loved in 2021.
“Whereas the slight outperformance suggests some resilience in financial actions for now, the general development stays on the draw back,” Yeap Jun Rong, market analyst at on-line buying and selling agency IG, mentioned in a be aware.
Analysis home Capital Economics mentioned it expects exports to fall additional on expectations the worldwide financial system would enter a recession this 12 months.
“Elevated rates of interest, declining family financial savings and excessive inflation are more likely to drag on home demand,” it added.
Tune Seng Wun, a regional economist with CIMB Personal Banking, advised AFP: “The Singapore financial system, although confronted headwinds, did nicely sufficient. However the outlook is cautious provided that we’re such a trade-dependent financial system.”
Prime Minister Lee Hsien Loong warned in his New Yr’s message that progress this 12 months is predicted to ease to 0.5-2.5 p.c.
“The worldwide outlook stays troubled. The Russia-Ukraine battle continues, with no good final result in sight,” he mentioned.
“US-China tensions are more likely to persist. How rapidly China recovers from Covid-19 stays to be seen, whereas the US and EU could nicely enter recession. Our financial system shall be affected.”
