Singapore narrowed its projection for 2023 growth after the economy fared worse than initially thought amid China’s faltering recovery and a global demand downturn.
The outlook for full-year growth was cut to a range of 0.5%-1.5% from 0.5%-2.5% previously, according to a statement from the Ministry of Trade and Industry Friday. That followed final estimates that showed gross domestic product expanded 0.1% last quarter from the previous three months, slower than the 0.3% pace expected initially.
The trade ministry said the economy grew 0.5% in the second quarter from a year ago, compared with an earlier estimate of 0.7% expansion.
The weak numbers signal more challenges for the trade-reliant economy, with manufacturing hit by falling global demand for goods. Recovery in China, Singapore’s largest commerce partner, is clouded by slowing consumption growth and a slump in construction, while US expansion is expected to slow in the remaining quarters of the year amid higher borrowing costs and a cooling labor market.
Singapore authorities flagged risks of a sharper retraction in global spending as advanced economies stand poised to tighten financial conditions to curb persistent inflation. They also warned of renewed supply disruptions and dent to global trade if there’s any escalation in the war in Ukraine and geopolitical tensions among global powers.
Further second-quarter GDP details, year-on-year, from the MTI include:
- Manufacturing declined 7.3% year-on-year, after 5.4% drop in the previous quarter
- Construction expanded 6.8% from a year ago, after 6.9% growth in first quarter
- Services producing industries rose 2.6% on-year, compared to 1.9% in previous three months
--With assistance from Aradhana Aravindan, Linus Chua, Chua Baizhen, Ailing Tan and Tomoko Sato.
(Updates with details throughout.)