Monday, June 17, 2024
HomesingaporeSingapore’s economic growth to improve in the second half of 2024: MAS

Singapore’s economic growth to improve in the second half of 2024: MAS

SINGAPORE: Singapore’s economic growth is projected to improve in the second half of next year after facing an “effective standstill” since late 2022, the Monetary Authority of Singapore (MAS) said on Monday (Oct 30).

Singapore should benefit as the global tech industry is gradually emerging from its trough and interest rates around the world level off, MAS said in its latest half-yearly macroeconomic review.

Growth rates across sectors are also moving toward their pre-COVID trends, the central bank said.

“For 2024, growth is projected to improve gradually in the second half of the year, and come in closer to its potential rate for the year as (a) whole,” the report said.

Economic growth for this year is expected to be in the lower half of the forecast range of 0.5 to 1.5 per cent.


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Domestic sectors grew more than usual after COVID-19 was declared endemic, though construction and food and beverage sales did not increase as quickly as before.

Travel-related industries reported double-digit growth rates as borders reopened after the pandemic. The number of international visitor arrivals rose to an average of 1.3 million per month in the third quarter, reaching 81 per cent of pre-COVID levels. Chinese tourists are now once again Singapore’s largest source of visitors.

Services like information and communications, architectural and engineering, and accounting segments performed well, but manufacturing and financial services suffered this year. 

“The third quarter of this year likely marked the turning point in the slowdown,” MAS said. Manufacturing output has likely bottomed, and activity in financial services could pick up as interest rates peak.


Core inflation, which excludes accommodation and private transport, is expected to edge down to between 2.5 and 3 per cent by December. At the start of the year, the figure stood at a 14-year high of 5.5 per cent.

While there is monthly volatility for electricity and gas prices, food prices have continued to fall and consumer goods prices are lower, weighed down by manufactured goods prices, MAS said.


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The strong Singapore dollar also helps to filter external inflationary pressures.

Including the impact of the goods and services tax hike, core inflation is expected to average around 4 per cent for the full year, just 0.1 percentage point below the 2022 figure.

In early 2024, both headline and core inflation are likely to see a temporary increase as the Goods and Services Tax (GST) rises to 9 per cent and public transport fare hikes kick in. Headline inflation may also rise due to higher Certificate of Entitlement (COE) premiums and petrol prices.

Prices of services may increase due to a lag effect, but overall, core inflation is forecast to be on an easing trajectory with easing domestic cost pressures and modest imported costs.

MAS highlighted geopolitical conflict, adverse weather events and faster wage increases as risks to the inflation outlook.


Singapore’s middle-income earners experienced the fastest wage growth in the past decade, but could be impacted by demographic constraints and technological changes in the coming years, MAS said.

The nominal income of those between the 21st and 80th percentile rose 42 per cent, compared with 36 per cent for higher- and lower-income earners.

Workers who improved their educational qualifications or moved to more productive or larger companies commanded higher wages, according to a study by MAS.

The average economic growth rate slowed in the past decade and the trend is expected to continue as Singapore’s population ages.

Middle-income workers could be displaced if new technologies replace labour or if they do not have the right skills to transition into new roles, said the central bank.

Workers should refresh their skills, and policies should focus on raising the absolute income of lower- and middle-income workers.

“Securing the real income growth of the broad middle is the basis for the sustained and inclusive economic progress of the country,” MAS said.

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