Analysts keep 2024 growth forecasts steady despite lower-than-estimate GDP

RHB sees the economy rising 2.5%, UOB projects 2.9% growth this year.

Economists kept their growth forecasts for the Singapore economy unchanged for 2024 after the state revised downwards the official GDP growth for both the fourth quarter and full-year 2023.

RHB Acting Group Chief Economist Barnabas Gan said they still expect the economy to expand by 2.5% this year, still faster than last year and within the government’s 1-3% official forecast for 2024.

UOB Global Economics & Markets Research also maintained its 2.9% GDP growth estimate for the year, despite MTI on Thursday slashing its official GDP growth estimate to 2.2% for the fourth quarter of last year from the earlier estimate of 2.8%.

GDP growth for the full year 2023 was also revised down to 1.1% from 1.2% initially.

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While the revisions were broad-based, affecting the manufacturing, construction and services sectors, UOB noted that MTI’s outlook on Singapore’s external demand remains largely unchanged with the US economic growth easing while expansion of China and the Eurone will stay subdued.

“Broader signs of recovery in external demand from the US and EU could emerge in 2H24 as tight financial conditions ease progressively driven by the projected commencement of rate cuts,” it said.

RHB’s Gan said they were optimistic about the outlook of the electronics, transport engineering, and general manufacturing industries for the next six to 12 months as they see the global chip demand bottoming out. 

On the global front, Gan sees Singapore benefiting from China’s economic rebound as well as the anticipated broader recovery of the global economy this year.

At home, UOB said the recovery of externally-oriented sectors like manufacturing, wholesale trade, transportation and storage as well as finance and insurance will stay uneven in the first half of the year, before posting more meaningful growth in the latter half.