SINGAPORE — Singapore's economy grew 2.8 per cent in the fourth quarter year-on-year, preliminary government data showed on Tuesday (Jan 2), faster than some economists expected and helped by improvements in construction and manufacturing.

The fourth quarter growth in gross domestic product (GDP) was faster than the one per cent expansion in the third quarter of 2023.

For the full year of 2023, Singapore's economy grew 1.2 per cent, moderating from the 3.6 per cent growth in 2022.

Both OCBC economist Selena Ling and Maybank economist Chua Hak Bin said the year-on-year growth was better than they had anticipated in the fourth quarter. Ling was expecting a 1.8 per cent expansion while Chua was looking at 2.5 per cent.

"Green shoots are sprouting in exports and manufacturing, brightening the outlook for 2024," said Maybank's Chua, who expects GDP growth of 2.2 per cent in 2024.

OCBC's Ling forecast range for 2024 is one to three per cent, in line with the trade ministry's projection.

"The key question is how much of a pickup in growth momentum we will have this year given the current uncertainties over whether the US will escape a recession, and if or when the Fed will cut rates, and how geopolitics will play out with US and other elections," she said.

On a quarter-on-quarter seasonally adjusted basis, GDP expanded 1.7 per cent in the October to December period, extending the 1.3 per cent expansion in the third quarter.

Monetary policy is due for review at the end of this month after the central bank increased the frequency of reviews from twice a year to quarterly starting in 2024.

In October, the Monetary Authority of Singapore left policy settings unchanged as inflation in the city-state moderated.

Singapore's core inflation slowed to 3.2 per cent in November last year from a peak of 5.5 per cent in January and February.

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Source: Reuters