Buildings in the central business district in Singapore, on Wednesday, Feb. 14, 2024. Singapore’s economy expanded by a slightly more modest pace than initially expected in 2023, as manufacturing activity contracted and services growth slowed.
Nicky Loh | Bloomberg | Getty Images
Singapore’s economy in 2024 is forecast to grow faster than estimated earlier, while the outlook for inflation has been revised lower, the Monetary Authority of Singapore’s survey showed Wednesday.
The survey of forecasters has pegged this year’s growth at 2.4% and headline inflation at 3.1%, compared with the December survey’s estimates of 2.3% GDP growth and inflation at 3.4%.
The city-state’s economic growth is expected to increase to 2.5% in 2025.
Singapore’s manufacturing sector — which makes up over 20% of the country’s GDP — is now expected to grow at 4% in 2024, up from 2.3%.
While economists raised their forecasts for the manufacturing, finance and insurance, and construction sectors, the outlook for the wholesale and retail trade, as well as accommodation and food services sectors was revised lower.
‘Swiftonomics’ to boost Q1 GDP
The economy is expected to grow at 2.6% in the first quarter, according to the survey, with advance GDP numbers due on April 12.
A Bloomberg report on March 9 said that economists had upgraded Singapore’s first-quarter growth forecasts after the Singapore leg of Taylor Swift’s Eras Tour.
The report added the concerts will add around SG$300 million to SG$400 million, or 20 basis points, to Singapore’s first-quarter GDP, according to DBS Bank economist Han Teng Chua. Swift had performed six shows in the country from March 2 to March 9.
Singapore’s gross domestic product “will probably expand 2.9%” in the first quarter, the report added.
Lower inflation
While the MAS survey reported that economists have lowered their headline inflation forecasts from 3.4% to 3.1% for 2024, the median forecast for the so-called “MAS core inflation” metric remained unchanged from the previous survey at 3%.
The MAS core inflation metric strips out prices of accommodation and private transport from the headline inflation figure.
Headline inflation and MAS core Inflation are forecast at 2% for 2025.
In light of these conditions, the economists also don’t expect changes to Singapore’s monetary policy in the upcoming April 2024 review.
Singapore sets monetary policy via exchange rate settings instead of a benchmark interest rate, allowing the Singapore dollar to strengthen and weaken within an undisclosed policy band against a basket of its major trading partners’ currencies.
