MAS Survey: Singapore's 2024 GDP growth forecast set at 2.4%

Source: Gutzy Asia

SINGAPORE: Private-sector economists have raised their growth expectations for Singapore's export-driven economy in 2024, citing hopes for a pickup in global demand, recovery in the electronics sector, and more robust growth in China.

The Monetary Authority of Singapore (MAS) released a quarterly survey of professional forecasters on Wednesday (13 March), projecting the city-state's gross domestic product (GDP) growth for 2024 at 2.4 per cent, up from an earlier prediction of 2.3 per cent.

According to the Ministry of Trade and Industry (MTI), the economy grew by 1.1 per cent in 2023, down from the 3.8 per cent growth recorded in 2022.

The MAS survey respondents also anticipate a 2.6 per cent year-on-year growth for the first quarter of 2024.

The majority of economists participating in the survey identified better-than-expected global growth for 2024 as the primary upside for Singapore's economic outlook.

However, they also highlighted potential risks such as slower external growth, increased geopolitical tensions, inflationary pressures, and concerns about Chinese growth prospects.

MTI has projected a modest improvement in trade-related sectors, estimating the Singapore economy to grow between 1 per cent and 3 per cent in 2024.

Nevertheless, they cautioned that higher interest rates and a slower-than-expected Chinese economy could weigh on global growth.

DBS Bank's economist, Chua Han Teng, expects Singapore's GDP growth to recover to 2.2 per cent in 2024, contingent upon better performance from external-oriented sectors such as manufacturing, wholesale trade, and financial services.

However, he warned of fragility due to uncertainties stemming from high-interest rates, conditions in China, and geopolitical risks.

Looking ahead to 2025, the MAS survey respondents projected GDP to expand by 2.5 per cent.

They expressed optimism that both all-items inflation and core inflation would ease in 2024, with median forecasts indicating decreases from previous surveys.

Regarding the labor market, respondents anticipated an unemployment rate of 2.1 per cent by the end of 2024, consistent with previous expectations.

Ministry of Manpower data showed overall unemployment averaging 1.9 per cent in 2023.

In terms of monetary policy, none of the respondents expected changes in MAS' tight stance in the April 2024 review.

However, some predicted a gradual shift towards easing in subsequent reviews starting from July and October.