Weak external outlook to affect 2023 GDP growth: analyst

Standard Chartered expects GDP growth to ease to 2.0% from 3.6% in 2022.

With major economies like the US and Europe expected to slow by 2023, Standard Chartered foresees Singapore's gross domestic product (GDP) growth to ease.

In a report, the expert said GDP growth will likely decline to 2.0% in 2023 from 3.6% in 2022.

Other headwinds which may affect the economy include the slow and bumpy recovery of China, the peaking of the electronics cycle, and higher domestic interest rates.

On the flip side, Standard Chartered said the continued recovery in international travel will bode well for Singapore's economy.

"Travel-related sectors such as air transport and accommodation services should benefit. Growth in regional economies, while likely to ease from 2022, should remain around long-term growth rates," Standard Chartered said.

Apart from GDP growth, the expert expects headline inflation to ease in 2023 from 6.1% to 5.0%.

"For headline inflation, we expect housing costs to remain firm as rents continue to be repriced. However, we expect less of an inflation contribution from transport costs, as vehicle permit prices should be more stable relative to 2022," the expert commented.