GDP to expand 0.5% to 2.5% in 2023: MTI

External demand outlook has weakened as US, Eurozone economies decelerate.

Singapore’s gross domestic product (GDP) is forecasted to grow between 0.5% to 2.5% in 2023, with growth likely to come at the midpoint of the range, The Ministry of Trade and Industry (MTI) said in its economic survey report for Q1.

The economy only grew 0.4% during the first three months of 2023, slower than the 2.1% expansion in Q4 2022.

“Taking into account the performance of the Singapore economy in the  first quarter of 2023, as well as the latest global and domestic economic  developments, MTI expects the economy to expand by “0.5 to 2.5 percent” in 2023, with growth likely to come in at around the mid-point of the  Range,” said Gabriel Lim,  Permanent Secretary (Policy), Ministry of Trade and Industry.

Lim noted that Singapore’s external demand outlook in 2023 weakened, hit by an expected deceleration of the US and the Eurozone’s economies. 

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The electronics downcycle is also deeper and more prolonged than expected, Lim said.

“Spillovers from China’s services-led recovery are also expected to remain weak given that services activities are less import-intensive than industrial activities,” Lim said.

Lim noted other downside risks in the global economy, including the recent banking fiasco in the US.

“These include the impact of recent banking stresses abroad on global financial  conditions, as well as the risk of escalations in the war in Ukraine and geopolitical tensions among major global powers,” Lim said.