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Shoppers browse goods at a shopping mall on Singapore’s Orchard Road © Isabel Kua/Reuters

Singapore’s economic growth beat government expectations last year as services rose despite a contraction in manufacturing.

Gross domestic product grew by 3.8% in 2022, beating official estimates of 3.5%, but well below growth of 7.6% in 2021.

The city-state’s economy grew 2.2% year-on-year in the fourth quarter of 2022, down from 4.2% growth in the previous quarter, the Commerce and Industry Ministry noted. . Adjusted for seasonal variations, the economy grew by 0.2% quarter on quarter.

“We think growth is likely to weaken further,” said Shivaan Tandon, emerging Asia economist at Capital Economics. He said Singapore’s exports are expected to fall if the global economy goes into recession in 2023.

“High interest rates, falling household savings and high inflation are likely to dampen domestic demand,” Tandon added. “We do not expect further monetary tightening from the Monetary Authority of Singapore.”

The Southeast Asian country’s manufacturing sector shrank 3% year-on-year in the fourth quarter, a reversal from 1.4% growth in the previous quarter.

“This was due to production contractions in the electronics, chemical and biomedical manufacturing clusters, which offset production expansions in the precision engineering, transportation engineering and general manufacturing clusters,” the ministry said.

The construction sector rose 10.4% year-on-year in the fourth quarter, following growth of 7.8% in the previous quarter. “Public and private sector construction output continued to recover,” the ministry said.

Services grew 2.3% year-on-year in the fourth quarter, a slower pace than the 5.7% growth in the previous quarter.

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