Amidst weaker demand outlook, SG economy seen to grow by 0.5%-2.5% in 2023

There will be a global slowdown in semiconductors and wholesale trade.

The expected global economic slowdown will also impact Singapore’s economy, which is expected to increase by 0.5% to 2.5% in 2023, the Ministry of Trade and Industry (MTI) said.

“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.

It cited that the semiconductors sector will be negatively affected as the global demand for such technology declines. Machinery of the precision engineering cluster is also expected to be hit by a cutback in capital spending by semiconductor manufacturers amidst weak demand.

Growth in the wholesale trade, water transport, and finance and insurance sectors is expected to be subdued by the slowdown in major external economies, said MTI.

But it is not all bad news for the economy as the travel recovery and foreigner entries will help expand aviation and tourism sectors such as air transport, accommodation, and arts, entertainment and recreation, as well as other related activities. 

Also, the industries that will benefit are rental and leasing of air transport equipment within the administrative and support services sector, and aircraft engine maintenance and repair work for the aerospace segment within the transport engineering cluster. 

The market’s GDP expansion eased by 4.1% year-on-year in the third quarter of 2022 from 4.5% growth in the previous quarter.