Singapore's Economic Growth in Q1 2024 Reaches Fastest Pace in 18 Months
According to Traderknows, data released on Thursday shows that Singapore's economy grew by 2.7% year-on-year in the first quarter of 2024, marking the fastest pace in 18 months. The government expects improvements in manufacturing and trade-related sectors in 2024.
This growth is consistent with preliminary estimates released last month and exceeds the 2.5% forecast by economists in a Reuters survey. It is the fastest year-on-year growth since the third quarter of 2022, when the economy grew by 4.1%.
Edward Robinson, Deputy Managing Director of the Economic Policy Group at the Monetary Authority of Singapore (MAS), stated that the current monetary policy settings are appropriate.
He said at a press conference, “The current currency policy band appreciation rate needs to be maintained to curb imported inflation and domestic cost pressures.”
“We believe this is sufficient to ensure mid-term price stability in the economy.”
The central bank maintained its monetary policy unchanged in its April review. The next policy review is scheduled for July.
OCBC Bank economist Selena Ling stated that MAS's policy is likely to remain unchanged for the rest of the year. "They are still waiting for core inflation to ease in the fourth quarter," she said.
Although inflation has fallen from a peak of 5.5% at the beginning of 2023, it remains resilient amid slowing economic growth, reaching a seven-month high in February.
On a seasonally adjusted quarter-on-quarter basis, GDP grew by 0.1% from January to March, in line with preliminary forecasts.
Leadership Change
The Ministry of Trade maintained its 2024 GDP growth forecast at 1.0% to 3.0%, stating that manufacturing and trade-related sectors are expected to gradually recover this year.
OCBC’s Ling noted that first-quarter data suggest the economy is on track to achieve a full-year GDP "slightly above 2%."
The trade-dependent economy's non-oil exports have been declining, contracting by 9.3% year-on-year in April and 20.8% in March.
Singapore's Enterprise Development Board stated on Thursday that non-oil export forecasts for this year are +4.0% to +6.0%.
The Ministry of Trade pointed to several risks, including geopolitical tensions disrupting supply chains and commodity markets, tightening global financial conditions, and emerging market volatility due to policy divergences with developed economies.
Singapore recently experienced its first leadership change in two decades, with Heng Swee Keat assuming the role of Prime Minister last week. In his inaugural speech, he noted that he takes office during a time of global challenges. "As an open economy, our livelihood will be hit when multilateralism breaks down," he said.
