3 factors weighing down Singapore’s economic growth

Analysts expect full-year GDP growth to clock in at 1.4%, lower than the 2022 record.

Singapore’s economic growth will significantly slow in 2023 due to three factors, analysts from Fitch Ratings revealed.

The first factor weighing down Singapore’s economic growth for the year is “base effects,” which analysts expect to become more unfavourable from Q223.

“In April 2022, the government eased community and border restrictions, which led to the economy growing by 4.5% y-o-y in that quarter. This suggests to us that headline growth will receive lesser support from the normalisation of the construction and travel-related sectors going forward,” Fitch Ratings said.

Fitch Ratings said the slow growth of the global economy will also affect Singapore's economic growth for the year.

Based on the report, the global economy will record a 2.0% growth in 2023, lower than the 3.1% record in 2022.

"Given that exports accounted for 183.3% of Singapore’s GDP in 2020-2021, the global economic slowdown will have a significant knock-on impact on the economy. The reopening of Mainland China will only provide limited support as exports to the market account for less than 15% of Singapore’s total,” Fitch Ratings said.

“Having long since peaked in July 2022, Singapore’s total export values contracted by 11.6% YoY in February, marking the fourth straight month of decline. We see scope for more export weakness over the coming quarters. Over the last six months, the S$NEER has further appreciated within the upper half of the policy band to a multi-year high, and this will likely weigh on Singapore’s export competitiveness even more,” the expert added.

Lastly, Fitch Ratings said Singapore's economy will likely be affected by the tighter fiscal policy, which weighs on domestic consumption.

“With effect from January 1 2023, the goods and services tax has been raised to 8%, from 7% previously whilst the government also announced higher levies and excise taxes on a range of products, including luxury cars, tobacco and property,” Fitch Ratings said.

“While the government has pledged to cushion the impact of the GST increase via the Assurance Package, the net impact on growth is likely to be negative,” the expert added.

Given these factors, Fitch Ratings analysts expect full-year GDP growth to clock in at 1.4%, lower than the 2022 record of 3.6%

Follow the link for more news on

Fitch Ratings

Singapore GDP

Reaching the people who run Asia's businesses is harder than it used to be.

Inboxes are crowded. Attention is short. The executives you most want to reach — the founders, CFOs, and operators who actually move budgets — are the hardest to find through the usual channels. If you're building a company, a category, or a reputation, you already know this.

We've spent twenty years building the room they read. Singapore Business Review is where senior decision makers in Singapore and across Southeast Asia come for business coverage they can't get elsewhere — in print, online, and in person at the summits and roundtables we host across seven markets.

If you have something these readers should know about — a point of view worth publishing, a product worth their attention, an event worth their time — we'd like to hear what you're trying to do.

Book a meeting

| Or download the media kit (PDF)

240,000 senior readers quarterly in print Top 1,700 Singapore companies reached

7 markets across Southeast Asia