Singapore’s economic growth to outperform US, EU in 2023

It is expected to increase by 2.3% YoY.

Singapore’s real Gross Domestic Product is expected to grow by 2.3% year-on-year in 2023, outperforming the US and the European Union by 2.3 times and 4.6 times, respectively, according to a report by Savills.

In a statement, Savills said the US economy is expected to grow by 1%, whilst the EU by 0.5%, citing the International Monetary Fund’s World Economic Growth Projection for 2023. China, Vietnam, Indonesia, and India, meanwhile are seen to lead global growth.

Global real estate markets remain affected by inflation and recession but there are “pockets of positivity” in Asia due to stronger growth prospects and the diversity of the region's economies and cities.

READ MORE: Weak external outlook to affect 2023 GDP growth: analyst

The Lion City’s real estate market is in a “good position” to avoid the effects of economic problems and geopolitical tensions globally, said Aland Cheong, executive director of Savills Singapore Research and Consultancy.

Chart from Savills.

“The main reason for the market possessing this fortitude is the relative lack of supply for most sectors, and for residential properties, it comes from developers strong financial holding power. Together, the market could overcome the effects of higher interest rates and economic slowdown,” he said.

Savills said that Singapore’s CBD Grade A Office will see an increase in rents and a decline in vacancies amidst the global economic slowdown and problems affecting the technology sector. 

Prime warehouse and logistics properties grew by 2.8% in the third quarter of 2022 and Savills expect rent to increase by 2% to 5% year-on-year in 2023.