Singapore stays ahead of Southeast Asian peers in FDI despite Q1 dip: McKinsey

FDIs fell 3.8% YoY.

Foreign direct investments (FDIs) broadly rose across Southeast Asia but the Lion City has once again proved its appeal to investors. 

McKinsey’s quarterly economic review for the region showed FDIs in Singapore went down 3.81% YoY to $32.7b in the first quarter of the year, but the city-state still retained its lead among its peers, accounting for a significant share of the region’s total FDI.

Singapore’s economy expanded at a faster rate of 2.7% YoY in Q1 from the 2.2% increase in the preceding three months.

McKinsey highlighted that this was the strongest YoY recorded since Q3 2022, but the slowest quarterly growth since Q1 2023.

Contributing to the economy’s growth were “temporal boosts” from major events like Taylor Swift’s concert, coupled with improvements in external-dependent sectors. 

Inflation in the city-state remains sticky at 3% and is projected to stay elevated until at least Q4 2024

“Analysts predict that the central bank could keep its policy rate unchanged in the next quarter, as inflation could remain elevated for the next few months, potentially easing only by the fourth quarter 2024,” McKinsey said.