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Singapore’s GDP grew by 2.7% in 1Q2024 based on advance estimates; MAS to maintain current rate of appreciation

Felicia Tan
·2-min read

On a q-o-q seasonally adjusted basis, the economy expanded by 0.1%.

Singapore’s gross domestic product (GDP) grew by 2.7% in the 1Q2024, according to the Ministry of Trade and Industry’s (MTI) advance estimates released on April 12.

The figure stood slightly ahead of market watchers’ expectations of a 2.6% y-o-y growth in the Monetary Authority of Singapore’s (MAS) March 2024 survey of professional forecasters.

On a q-o-q seasonally adjusted basis, the economy expanded by 0.1%.

The manufacturing sector grew by 0.8% y-o-y in the 1Q2024, moderating from the 1.4% y-o-y expansion in the previous quarter.

The construction sector expanded by 4.3% y-o-y, extending the 5.2% y-o-y growth in the 4Q2023.

The wholesale & retail trade and transportation and storage sectors collectively expanded by 2.7% y-o-y, accelerating from the 1.0% growth in the quarter before.

The group of sectors comprising the information & communications, finance & insurance and professional services sectors grew by 4.2% y-o-y in the 1Q2024, outpacing the 3.6% y-o-y growth seen in the 4Q2023.

Growth of the remaining group of services sectors (i.e., accommodation & food services, real estate, administrative & support services and other services sectors) grew by 2.9% y-o-y in the 1Q2024, higher than the 2.0% growth in the preceding quarter.

At the same time, MAS announced that it will maintain the prevailing rate of appreciation of the Singapore dollar nominal effective exchange rate (S$NEER) policy band. There will be no change to its width and the level at which it is centred, says the central bank in its April 12 announcement.

It adds that the current monetary policy settings remain “appropriate” with the Singapore economy expected to strengthen over 2024. Growth is expected to become more broad based.

“The slightly negative output gap is projected to narrow further in 2H2024, even as underlying inflationary pressures gradually dissipate,” says MAS.

The country’s core inflation is expected to remain elevated in the “earlier part of the year” but should remain on its “broadly moderating path” and lower in the 4Q2024 before falling even further in 2025.

“The prevailing rate of appreciation of the policy band is needed to keep a restraining effect on imported inflation as well as domestic cost pressures, and is sufficient to ensure medium-term price stability,” continues MAS.

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