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Singapore's economy expands 4.1 pct in Q3 2022

23/11/2022 10:50 AM

SINGAPORE, Nov 23 (Bernama) -- Singapore’s economy expanded by 4.1 per cent year-on-year in the third quarter of 2022 (Q3 2022), easing from the 4.5 per cent growth in the previous quarter, according to the republic’s Ministry of Trade and Industry (MTI).

In its ‘Economic Performance in the Third Quarter of 2022’ report released today, MTI said the 2022 gross domestic product (GDP) growth forecast for the republic has been narrowed to around 3.5 per cent, from 3.0-4.0 per cent previously.

“This is after taking into account the performance of the Singapore economy in the first three quarters of the year, as well as the latest external and domestic developments,” it said.

The ministry also projected that Singapore’s economy is expected to grow by 0.5-2.5 per cent in 2023.

On a quarter-on-quarter seasonally-adjusted basis, the island-city’s economy grew by 1.1 per cent, reversing the 0.1 per cent contraction in Q2 2022.

On a sectoral basis, the republic’s manufacturing sector expanded at a slower pace of 0.8 per cent year-on-year (y-o-y), compared to the 5.6 per cent growth in the preceding quarter.

Growth was supported by output expansions in the transport engineering, general manufacturing and precision engineering clusters, which outweighed output declines in the electronics, chemicals and biomedical manufacturing clusters, the ministry said.

The construction sector, meanwhile, grew by 7.8 per cent y-o-y, accelerating from the 4.8 per cent growth in Q2 2022 as both public and private sector construction output rose.

As for the transportation and storage sector, the growth improved to 6.8 per cent y-o-y from 5.0 per cent in the previous quarter, it said.

“Within the sector, the air transport segment recorded strong growth from the low base in Q3 2021, mainly due to the increase in air passengers handled.

“At the same time, the land transport and water transport segments also recorded expansions,” said the ministry.

The food and beverage services sector saw robust growth of 30.5 per cent y-o-y from the low base last year, extending the 23.4 per cent expansion in Q2 2022.

Growth of the sector was bolstered by a strong pickup in sales volumes at food caterers, restaurants, and cafes, food courts & other eating places, said MTI.

As for the economic outlook for 2022, the ministry said since the Economic Survey of Singapore in August, Singapore’s external demand outlook has softened further due to the weaker outlook for the Eurozone economy amidst an energy crunch, as well as for China as it continues to grapple with recurring COVID-19 outbreaks and a property market downturn.

As for the rest of the year, the weaker external economic outlook will weigh on the growth of outward-oriented sectors in Singapore, including the electronics and chemicals clusters.

On the other hand, the strong recovery in air travel and international visitor arrivals is expected to continue to benefit aviation and tourism-related sectors such as air transport and arts, entertainment and recreation, as well as consumer-facing sectors like food and beverage services.

Looking ahead to 2023, MTI said GDP growth rates in most major economies are expected to moderate further from 2022 levels, with sharp slowdowns projected in the United States and Eurozone.

In Asia, MTI noted that China’s growth is projected to pick up from a low base but remain sluggish as its zero-COVID policy is likely to continue to constrain household consumption.

Meanwhile, the ministry said GDP growth in the Southeast Asian economies of Malaysia and Indonesia is expected to moderate amidst weaker demand for their merchandise exports, although the ongoing recovery in domestic and tourism demand will provide some support, it said.

At the same time, the ministry said significant uncertainties and downside risks in the global economy remain.

Against this backdrop, the growth of outward-oriented sectors in Singapore is expected to weaken in tandem with the deterioration in external demand conditions.

For instance, the semiconductors segment of the electronics cluster is expected to be negatively affected by the fall in global demand for semiconductors, while the machinery and systems segment of the precision engineering cluster is projected to be weighed down by a cutback in capital spending by semiconductor manufacturers amidst weak demand.

On the other hand, the growth prospects of several sectors remain positive, particularly the aviation and tourism-related sectors, as the continued recovery in air travel and international visitor arrivals will support the expansion of sectors such as air transport, accommodation and arts, entertainment and recreation.

-- BERNAMA


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