Singapore announced on Friday that its economy exceeded expectations in the third quarter and revised its forecast for the year due to stronger demand from key trading partners.
The trade ministry now anticipates growth of “approximately 3.5%” in 2024, surpassing the upper range of the government’s previous estimate of 2.0-3.0%.
Due to its heavy reliance on international trade, Singapore’s economic performance is often considered a gauge of the global environment.
Year-on-year growth in July-September was reported at 5.4%, higher than the initial estimate of 4.1% and economists’ predictions of less than 4.0%.
This brought the average growth for the first nine months of the year to 3.8%, leading the ministry to raise its full-year outlook.
This is the second time this year that officials have raised their forecast, having previously adjusted it to 2.0-3.0% from 1.0-3.0% in August.
“Growth in the third quarter was mainly driven by the manufacturing, wholesale trade, and finance and insurance sectors, which were supported by the upturn in the global electronics cycle,” the ministry explained.
The manufacturing sector, a key component of Singapore’s economy, expanded by 11.0% year-on-year, reversing a 1.1% contraction in the previous quarter.
An increase in demand for computer chips, a significant Singaporean export, was fueled by a surge in interest in artificial intelligence technology.
“The electronics industry saw strong growth, driven by the high demand for smartphone and personal computer semiconductor chips, although demand for automotive and industrial semiconductor chips remained subdued,” the ministry noted.
Major export markets such as the United States and the eurozone, as well as some regional economies, outperformed expectations in the third quarter, according to the ministry.
Despite this positive outlook, the ministry is forecasting growth of 1.0-3.0% for 2025 due to increased global economic uncertainties, including concerns over the policies of the incoming U.S. administration, with risks tilted towards the downside.
