Senior Economist at UOB Group Alvin Liew comments on the recent revision of GDP figures in Singapore.

Key Takeaways

“Singapore’s final 4Q22 GDP growth was revised lower to 2.1% y/y, 0.1% q/q (versus Bloomberg median forecast & UOB est. of 2.3% y/y) from the advance estimate of 2.2% y/y, 0.2% q/q. The downward revision for 4Q GDP came about despite the better-than-expected manufacturing sector performance and instead, it was let down by the downward revisions to the services and construction sectors.  For the full year, GDP growth was revised lower to 3.6% in 2022 (from advance estimate of 3.8%) as growth in the manufacturing and services growth were revised a tad lower.”

“The message from the Ministry of Trade and Industry (MTI) provided a small silver lining as it noted that “Singapore’s external demand outlook has improved slightly.” The MTI sounded an optimistic tone for the growth outlook for aviation- and tourism-related sectors but remained downbeat towards outward-oriented sectors. With the cautious but “slightly” improved external outlook and barring the materialisation of the highlighted risk factors, the MTI kept its Singapore GDP growth forecast for 2023 unchanged at the range of “0.5-2.5%.” As for the trade outlook, the Enterprise Singapore (ESG) is maintaining the forecast of “-2.0% to 0.0%” for both total merchandise trade and NODX, due to a high base in 2022 and lower expected oil prices.”

“Our SG GDP Outlook - Our 2023 outlook is largely premised on broad moderation in external economies, and we project key end markets for Singapore to enter a (shallow) recession this year amidst aggressive monetary policy tightening stance among advanced economies. Services could fare better in 2023 as upside growth factors could be attributed to the continued recovery in leisure and business air travel and inbound tourism. We keep our modest 2023 GDP growth forecast of 0.7% (closer to the lower end of the official forecast).”