Singapore’s finance and insurance industry shrank 0.9% in Q1

Banks saw a decline in net fees and commissions during the first three months of 2023.

The Lion City’s finance and insurance sector shrank by 0.9% in Q1 compared to the same quarter in 2022, according to the latest economic survey released by Singapore’s Ministry of Trade and Industry (MTI).

This extends the 0.3% year-on-year contraction in Q4 2022.

Contractions in the banking and insurance segments more than offset expansions in the other auxiliary activities and fund management segments, the MTI said.

“Specifically, the banking segment contracted amidst a decline in net fees & commissions and credit intermediation, whilst the insurance segment shrank due to the weak performance of the life insurance sub-segment,” MTI wrote.

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On a quarter-on-quarter seasonally adjusted basis, Singapore’s finance and insurance sector contracted by 0.1% in Q1, following the flat growth recorded in the fourth quarter. 

Overall, the MTI expects Singapore's economy to grow between 0.5% to 2.5% in 2023. Gabriel Lim, Permanent Secretary (Policy) for MTI, noted the recent banking fiascos in the West amongst reasons for the expected slower growth in 2023.

“These include the impact of recent banking stresses abroad on global financial conditions, as well as the risk of escalations in the war in Ukraine and geopolitical tensions among major global powers,” Lim said in a speech.