According to the Ministry of Trade and Industry, the country’s economic growth is expected to slow to 0.5% to 2.5% in 2023 due to global uncertainties.
This year, the gross domestic growth narrowed from 3% to 4%.
Since August, the country’s external demand outlook has decreased due to the weaker outlook for the Eurozone economy driven by an energy crunch, as well as for China as it continues to fight recurring COVID-19 outbreaks and a property market downturn.
More from OMY: Singapore PM Lee warns citizens to brace for economic challenges
In its 2023 forecast, the MTI said that GDP rates for major economies are expected to moderate further from 2022 levels. Sharp slowdowns are also projected in the Eurozone and the US.
Next year, global disruption supplies are expected to continue due to the conflict in Ukraine. However, the frequency of these disruptions is expected to decrease.
For the third quarter of 2022, Singapore’s economy increased by 4.1% year-on-year, easing from 4.5% growth in the preceding quarter.
On the positive side, there is a strong recovery in international visitor arrivals and air travel. This is expected to continue and benefit sectors like recreation, food and beverage services, entertainment, transport, arts, and other tourism-related sectors.
More from OMY: MAS seal cooperation with 4 ASEAN central banks to boost regional payment connectivity
Despite this, financial stability risks remain, especially now as advanced economies raise interest rates to combat inflation.
More from OMY: SG Gov’t enacts new measures to help Singaporeans deal with inflation
“Against this backdrop, the growth of outward-oriented sectors in Singapore is expected to weaken in tandem with the deterioration in external demand conditions,” said MTI.
More from OMY: How To Invest In Singapore: A Beginner’s Guide