Singapore Economic Revival on the Horizon: Singapore’s economic prospects are looking up for the second half of the coming year after experiencing a virtual standstill in growth since late 2022, according to the Monetary Authority of Singapore (MAS). The global tech industry’s gradual recovery and stabilization of interest rates worldwide are expected to benefit Singapore. Growth rates across various sectors are also converging toward their pre-COVID levels.
MAS’s latest half-yearly macroeconomic review anticipates a gradual improvement in growth in the latter half of 2024, bringing it closer to its potential rate for the year as a whole. Economic growth for this year is expected to fall within the lower half of the forecast range of 0.5% to 1.5%. After COVID-19 was declared endemic, domestic sectors showed more growth, but construction and food and beverage sales lagged behind.
The reopening of borders led to double-digit growth rates in travel-related industries, and international visitor arrivals reached 81% of pre-COVID levels in the third quarter, with Chinese tourists being the largest source.
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Core inflation (excluding housing and private transport) is predicted to fall to 2.5% to 3% by December, down from its 14-year high of 5.5% at the start of the year. Lower food and consumer goods prices have contributed to this drop. The GST increase to 9% and public transport cost hikes may briefly raise inflation in early 2024. Geopolitical problems, bad weather, and higher pay increases threaten inflation.
MAS highlighted the challenges middle-income workers in Singapore may face in the coming years due to demographic constraints and technological changes. While they experienced the fastest wage growth in the past decade, they could be displaced if new technologies replace labor or if they lack the necessary skills to transition into new roles.
To address this, the central bank recommends workers update their skills, and policies should aim to increase the absolute income of lower- and middle-income workers, which is essential for inclusive economic progress.
In conclusion, Singapore’s economic outlook suggests a gradual recovery in the second half of 2024, with inflation expected to ease, but challenges for middle-income workers in a changing economic landscape need to be addressed.
Our Reader’s Queries
What is the economic situation in Singapore 2023?
Singapore’s economy managed to avoid a recession despite the global economic slowdown caused by high interest rates. Preliminary data released on Tuesday shows that the economy grew by 1.2% in 2019. This is a positive sign for the country’s economic stability and growth.
What is the economic outlook for Singapore in 2024?
The Monetary Authority of Singapore (MAS) recently released a quarterly survey of professional forecasters, which projected a 2.3% GDP growth for The Republic in 2024. This is a slight decrease from the earlier prediction of 2.5%.
What is the future of Singapore’s economy?
The Singapore economy is predicted to maintain a steady growth rate of 1% in 2023, as previously projected in the September survey. However, the outlook for most sectors of the economy is pessimistic, with the exception of construction, accommodation, and food service sectors. Despite this, private consumption is expected to see an increase this year.
How did Singapore achieve an economic miracle?
Lee Kuan Yew prioritized growth, making Singapore an appealing investment destination, attracting top talent, and developing state-of-the-art infrastructure with excellent air and sea connections. He also implemented a low and transparent tax system and established a clean and efficient bureaucracy. These efforts have resulted in a strong and prosperous Singapore.