Singapore’s gross domestic product (GDP) grew 2.9 percent year-on-year during the second quarter of 2024, in line with the advance estimates it released last month and above market expectations, government data showed on Tuesday. The Ministry of Trade and Industry revealed that Singapore’s GDP rose 0.4 percent quarter-on-quarter and 3 percent annually during the first half of 2024.
The ministry attributed the country’s GDP growth in the second quarter to the wholesale trade, finance and insurance, and information and communications sectors. In contrast, the manufacturing sector declined, largely due to a contraction in the biomedical manufacturing cluster.
Economic growth forecast narrows
The ministry also announced that it narrowed Singapore’s GDP growth forecast for 2024 to 2-3 percent from the earlier 1-3 percent. On balance, the ministry expects Singapore’s external demand outlook to be resilient for the rest of the year. However, downside risks in the global economy remain.
“First, an intensification of geopolitical and trade conflicts could dampen business sentiments and add to production costs, which could weigh on global trade and growth,” said the ministry in a statement. In addition, disruptions to the global disinflation process could lead to tighter financial conditions for longer, and trigger market volatility or latent vulnerabilities in banking and financial systems.
Manufacturing to see gradual recovery
Despite the risks, Singapore expects its manufacturing sector to see a gradual recovery in the second half of the year. In particular, the electronics cluster will likely recover more strongly due to robust demand for smartphone, PC and AI chips.
In addition, the chemicals cluster will likely continue to expand, supported in part by higher production in the petrochemicals and specialty chemicals segments. However, the biomedical manufacturing cluster will likely contract, as pharmaceutical output should remain weak for the rest of the year.
For more economy news, click here.
