Singapore’s economic growth slows to 3.8% in 2022; outlook darkens for 2023

SINGAPORE – Singapore’s economy grew by 3.8 percent in 2022, slowing sharply from the 7.6 percent growth achieved a year earlier, said the Ministry of Trade and Industry (MTI) on Jan 3, 2023. In the fourth quarter, the economy expanded 2.2 percent on a year-on-year basis, moderating from the 4.2 percent growth in the previous quarter. The ministry did not comment on its November forecast for the economy to grow between 0.5 percent and 2.5 percent in 2023.

The fourth-quarter slowdown came on the back of a 3 percent year-on-year contraction of the key manufacturing sector. This was a reversal from the 1.4 percent growth in the previous quarter.

Among the services sectors, wholesale and retail trade and transportation and storage collectively grew 2.3 percent in the fourth quarter, slower than the 5.7 percent growth in the previous quarter. However, within the services sector, accommodation and food, real estate, administrative and support services collectively grew 8.2 percent, extending the 9.3 percent growth in the third quarter.

While overall economic growth has slowed from 2021, the 3.8 percent estimate for 2022 is still better than MTI’s earlier forecast of 3.5 percent for the year, thanks to the still-growing services sector. Final estimates for fourth-quarter and full-year 2022 growth will be released in February.

Analysts said anaemic global growth due to high inflation and rising interest rates has started to hit merchandise exports from Asia, pulling the region’s manufacturing sector into recession territory. However, a relatively resilient services sector aided by the reopening tailwinds, should mitigate the weakness in manufacturing and also keep unemployment low.