Singapore hikes 2024 outlook after topping third-quarter forecasts

Singapore skyline | Photo by JMS

Singapore, Singapore — Singapore said Friday its economy grew more than expected in the third quarter and raised its forecast for the year thanks to stronger demand from key trading partners.

The trade ministry said it saw expansion of “around 3.5 percent” in 2024, above the upper end of the government’s previous estimate of 2.0-3.0 percent.

The Asian city-state’s economic performance is often seen as a barometer of the global environment because of its heavy reliance on international trade.

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The ministry said the economy grew 5.4 percent year-on-year in July-September, beating the preliminary estimate of 4.1 percent and economists’ forecasts of less than 4.0 percent.

The reading brought average growth for the first nine months of the year to 3.8 percent, prompting the ministry to raise the full-year outlook.

The upgrade was the second this year after officials in August bumped their forecast to 2.0-3.0 percent from 1.0-3.0 percent.

“Growth in the third quarter was primarily driven by the manufacturing, wholesale trade and finance and insurance sectors, which were bolstered in part by the upturn in the global electronics cycle,” the ministry said.

Manufacturing, a pillar of the economy, expanded 11.0 percent year-on-year, reversing the 1.1 percent contraction in the previous quarter.

A rush for all things linked to artificial intelligence drove up demand for computer chips, a key Singapore export.

“The electronics cluster grew robustly, supported by strong demand for smartphone and personal computer semiconductor chips, even though demand for automotive and industrial semiconductor chips remained weak,” the ministry said.

Major export markets such as the United States and the eurozone, as well as some regional economies, performed better than expected in the third quarter, according to the ministry.

The ministry, however, projected 2025 growth to come in at 1.0-3.0 percent owing to increased global economic uncertainties, including “uncertainty over the policies of the incoming US administration, with the risks tilted to the downside”.