Singapore’s gross domestic product (GDP) grew by 4.1% on a y-o-y in the 3Q2024, according to advance estimates released by the Ministry of Trade and Industry (MTI) on Oct 14. This was led by the manufacturing sector which expanded by 7.5% y-o-y, rebounding from the 1.1% y-o-y contraction in the previous quarter.
On a q-o-q seasonally-adjusted basis, the country’s economy expanded by 2.1%, faster than the 0.4% q-o-q growth seen in the 2Q2024. Singapore’s GDP also rose by 2.1% on a y-o-y basis in 2Q2024. The higher q-o-q expansion was also led by the manufacturing sector, which rose by 9.9% compared to the previous quarter’s 1.2% contraction.
The rest of the sectors reported y-o-y and q-o-q expansions with the exception of the wholesale & retail trade and transportation & storage sector, which contracted by 0.6% q-o-q.
With the stronger-than-expected growth momentum seen in Singapore’s economy and the country’s trading partners expected to remain on a “steady expansion path” in the quarters ahead, the Monetary Authority of Singapore (MAS) has kept the prevailing rate of appreciation of the S$NEER (or Singapore dollar nominal effective exchange rate) policy band. There will be no change to its width and the level at which it is centred.
For the rest of 2024, Singapore should see sustained growth thanks to the ongoing upswing in the electronics and trade cycles as well as the easing in global financial conditions.
As such, the central bank expects Singapore’s full-year GDP to come in around the upper end of its 2% to 3% range, as previously forecasted. It adds that the negative output gap is projected to close in the second half of the year.
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In 2025, the Singapore economy is expected to expand close to its potential rate. However, the MAS remains uncertain over the economic outlook with geopolitical and trade conflicts potentially leading to “sizeable drags” on global and domestic investment and trade.
“There is also uncertainty around the pace and impact of global macroeconomic policy easing, and with it, the durability of the electronics upturn,” MAS adds in its Oct 14 statement.
Singapore’s core inflation is expected to average between 2.5% to 3% in 2024 with the figure expected to come in around 2% in 4Q2024. This is expected to drop further to average around the mid-point of 1.5% to 2.5% in 2025, says MAS.
Headline – or CPI-All Items – inflation should average around 2.5% in 2024 and around 1.5% to 2.5% in 2025. The lower headline inflation comes as accommodation inflation is expected to slow, partly offsetting an expected pickup in private transport inflation amid still-firm car purchases.
