Economy grew 3% in H1

GDP growth was slightly slower in Q2 as the manufacturing sector shrunk.

Singapore’s economy registered stable growth in the first six months of 2024, as officials estimate a 2%-3% GDP growth for the whole year.

Economy grew 3% year-on-year (YoY) during the first six months of 2024, according to data with the Ministry of Trade and Industry (MTI).

In Q2, Singapore’s economy expanded 2.9% YoY, slightly slower than the 3% growth in Q1, according to latest data from the Ministry of Trade and Industry (MTI). Based on data from the Asian Development Bank (ADB), Singapore's economic growth in Q2 is in line with its Q1 growth of 2.7%.

The growth in Q2 was primarily driven by growth in the wholesale trade, finance & insurance, and information & communications sectors. 

The electronics cluster is now back in the black, supported by strong demand for smartphone, PC and AI-related chips– even as demand for automotive and industrial chips remained weak. 

By contrast, the manufacturing sector shrank, largely due to a contraction in the biomedical manufacturing cluster caused by a sharp fall in pharmaceuticals output. 

Consumer-facing sectors such as retail trade and food & beverage services sectors shrank, partly due to an increase in outbound travel by locals, the MTI said.

External demand outlook ‘resilient’
For 2024, the MTI has narrowed its GDP growth forecast to 2% to 3%, from 1% to 3% previously.

Officials expect Singapore’s external demand outlook to be “resilient” for the rest of 2024, but warned of downside risks to the global economy on the back of intensifying geopolitical and trade conflicts.

“First, an intensification of geopolitical and trade conflicts could dampen business sentiments and add to production costs, which could weigh on global trade and growth,” the MTI said.

The MTI also warned of disruptions to the global disinflation process, which could lead to tighter financial conditions for longer. This could also trigger market volatility or vulnerabilities in banking and financial systems. 

Singapore’s manufacturing sector is expected to see gradual recovery in the second half of 2024, particularly the electronics cluster.

The chemicals cluster is expected to continue to expand, supported in part by higher production in the petrochemicals and specialty chemicals segments. 

However, the biomedical manufacturing cluster is likely to contract, as pharmaceuticals output is projected to stay weak for the rest of the year. 

Key trading partners
Meanwhile, performance of key trading partners is a mixed bag. The US economy is expected to see slower growth as consumption growth slows on the back of weak labour conditions. 

Europe’s GDP growth is expected to increase gradually.

In Asia, China’s GDP is expected to expand slower, but its property market may stabilize thanks to government support. 

Southeast Asia’s GDP growth is expected to pick up slightly thanks to improvements in domestic demand as well as the ongoing recoveries in global electronics and tourism demand, according to the MTI.