Tight labour market, sluggish domestic activity to drag Singapore's economic growth

It's pegged to hit 4.4% in 2014.

According to Standard Chartered, on an expenditure basis, the main growth driver in 2013 was external demand. 

Exports rose 3.6%, versus 1.4% in 2012, while private consumption growth slowed to 2.7% from 4.1% in 2012. Spending on transport fell 3.6%, in line with fewer vehicle-ownership permits being issued.

Here's more from Standard Chartered:

Investment contracted by 2.6% in 2013. Residential- building construction was strong, growing 9.2%, but investment in transport equipment fell by a sharp 26.9% on a real basis.

Investment in machinery, equipment and software was also weak and fell 5.2%, likely due to weak external demand in H1.

Net exports contributed 2.2ppt to full-year GDP growth, a significant improvement from the 4.4ppt subtraction from GDP growth in 2012.

We expect growth to improve to 4.4% in 2014. This is slightly more optimistic than the government’s growth forecast of 2-4%. Singapore’s highly open economy should benefit from stronger global growth, but the tight labour market and the slowdown in domestic activity are likely to curb the overall upside to growth.