GDP to grow 3.7% YoY in 2022: RHB

The forecast was revised upward from 3.2%.

Singapore’s GDP is expected to grow 3.7% year-on-year (YoY) in 2022, according to RHB, upgrading its previous forecast of 3.2%, following the “data surprise” on the economic growth.

In a report, RHB noted that the GDP expansion by 4.4% YoY in the third quarter was far from the Bloomberg forecast of 3.5%. It added that the second quarter growth was revised slightly higher to 4.5% YoY.

“In line with our forecasts, Singapore has comfortably avoided a technical recession (defined as two consecutive quarters of negative sequential growth) in 3Q22. Still, 3Q22 GDP growth had surprised our expectation for a milder 3.2% YoY growth,” RHB said.

RHB maintained its view that the growth in the fourth quarter will be slow. With the full-year forecast, the economy is expected to expand by 2.1% YoY in the last three months of 2022.

“We continue to expect Singapore’s services to account for the lion's share of growth, albeit manufacturing softness to be expected in 4Q22. For 2023, GDP momentum is expected to slow, especially in 1H23, before a discernible acceleration is observed towards the end of next year” it said.

It also maintained its forecast that its GDP growth for 2023 is at 3% due to high global inflation, along with a deceleration of global economic activity in the third quarter.

The tighter financial conditionals especially in developed economies is also expected to dampen private consumption and investment.

“In a nutshell, there remain to be plenty of uncertainties surrounding Singapore’s growth prognosis in 2023, given the current global economic slowdown and persistently high inflation,” it said.