People view light installations for Christmas at Singapore’s Gardens by the Bay on Dec. 18, 2023. (Photo by Then Chih Wey/Xinhua via Getty Images)
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Singapore’s economy grew 2.8% year-on-year in the final quarter of 2023, according to advance estimates from the country’s Ministry of Trade and Industry on Tuesday.
This was a sharp increase from the 1% expansion recorded in the third quarter, and the fastest rate of growth since the third quarter of 2022.
On a quarter-on-quarter seasonally-adjusted basis, the economy grew 1.7%, a larger expansion than the 1.3% in the third quarter.
For the year 2023, the economy grew by 1.2%, a slower pace from the 3.6% growth in 2022. This was in line with the MTI’s expectations, which forecast the economy to grow “around 1%” in November.
In his New Year’s message on Jan. 1, Singapore Prime Minister Lee Hsien Loong said the country “avoided a recession” in 2023. Lee described the year as “challenging,” citing a “troubled” international environment, such as the conflicts in Gaza and Ukraine, as well as tensions between the U.S. and China.
He added that despite this, “households are still feeling the pressure of higher cost of living, though inflation is gradually coming down.”
Singapore narrowly avoided a technical recession in 2023 after recording a 0.1% quarter-on-quarter growth in the second quarter, following a 0.3% contraction in the first quarter. A technical recession is commonly defined as two straight quarters of GDP contraction.
Most notably, Singapore’s manufacturing sector, which comprises about 20% of its economy and the country’s largest sector, expanded by 3.2% year-on-year in the fourth quarter, reversing from the 4.7% contraction in the previous quarter.
The manufacturing sector had recorded consecutive year-on-year declines in the first three quarters of 2023, before the turnaround in the final quarter.
The ministry said “growth in the sector was due to output expansions across all clusters, with the exception of the precision engineering cluster.”
In November, MTI forecast that Singapore’s GDP will see an expansion of about 1% to 3% in 2024, adding that major global economies like the U.S. will likely slow in the first half of the year, before picking up gradually in the second half of the year.