Southeast Asian city-state warns of rising ‘downside risks’ amid rising interest rates and escalation of war in Ukraine.
Singapore’s economy grew 0.4 percent in the first quarter after government warnings of gloomy prospects for the global economy.
The economic performance of the Southeast Asian city-state in the January-March period was better than expected, but lagged behind the previous quarter’s 2.1 percent growth.
The Ministry of Trade and Industry (MTI) on Thursday warned of a rise in “downside risks”, including rising interest rates and escalations in Ukraine’s war, but maintained its 2023 growth forecast between 0.5 and 2.5 percent.
The ministry said this year’s growth is likely to fall in the middle of the forecast range.
Singapore’s economy, a major financial center heavily dependent on trade, is often seen as a barometer of the global economy due to its exposure to international conditions.
Gabriel Lim, Permanent Secretary of the Ministry of Commerce, said the demand outlook for 2023 has deteriorated.
“Singapore’s foreign demand outlook for the remainder of the year has weakened,” Lim told a news conference.
“Excluding the expected slowdown in advanced economies, the electronics downcycle is likely to be deeper and longer lasting than previously anticipated.”
Singapore’s economy grew by 3.8 percent in 2022, up from 7.6 percent the previous year, as the lifting of COVID-19 restrictions and border controls helped boost economic activity.