22-11-2024 (SINGAPORE) Singapore’s economy has demonstrated remarkable resilience in the third quarter of 2024, posting a stronger-than-anticipated growth of 5.4 per cent year-on-year, prompting the government to revise its annual growth forecast upwards.
The Ministry of Trade and Industry (MTI) has upgraded its 2024 growth projection to “around 3.5 per cent” from the previous estimate of 2 to 3 per cent, following the economy’s robust performance in the first three quarters, which saw an aggregate growth of 3.8 per cent.
The third-quarter figures significantly exceeded both the preliminary estimate of 4.1 per cent and the revised second-quarter growth of 3 per cent. On a quarter-on-quarter seasonally adjusted basis, the economy expanded by 3.2 per cent, marking a substantial improvement from the previous quarter’s 0.5 per cent growth.
Manufacturing emerged as a key driver, recording an impressive 11 per cent year-on-year expansion, reversing the previous quarter’s 1.1 per cent contraction. The services sector maintained its positive trajectory, growing by 4 per cent, with particularly strong performances in transportation and storage (7.5 per cent), finance and insurance (5.4 per cent), and wholesale trade (4.9 per cent).
However, the MTI has adopted a more cautious stance for 2025, projecting growth between 1 and 3 per cent amid global uncertainties. Key concerns include potential geopolitical escalations, policy uncertainty under the incoming US administration, and possible disruptions to global disinflation efforts.
Consumer-facing sectors continue to face headwinds, with retail trade and food and beverage services experiencing sustained contractions. This weakness is attributed to strong outbound travel by locals and slower-than-expected recovery in international visitor arrivals and tourist spending.
Looking ahead, Singapore’s external demand outlook remains resilient for the remainder of 2024, supported by the recovery in global electronics demand. However, tourism-related sectors face ongoing challenges due to subdued international visitor numbers and spending.
The construction sector maintained positive growth at 3.7 per cent year-on-year, though slightly moderating from the previous quarter’s 4.8 per cent expansion.
MTI’s economic survey indicates that while Singapore’s key trading partners may experience slightly moderated growth, regional economies, particularly in Southeast Asia, are expected to maintain steady growth, driven partially by increasing global electronics demand.
