Singapore's Economic Outlook for 2024: Growth Projections and Inflation Insights

Economic Growth Projections for 2024

On Monday, the Monetary Authority of Singapore (MAS) announced that it expects the country's gross domestic product (GDP) growth to land at the upper end of its 2%-3% forecast range for 2024. This positive outlook is supported by robust economic performance in the third quarter of 2023.

Strengthening Economic Indicators

According to the MAS's latest macroeconomic review, the third quarter saw a significant strengthening in economic growth, attributed to a recovery in the manufacturing sector, increased trading activities in finance, and a resurgence of Chinese tourists following a visa exemption introduced in February. Preliminary data indicates that Q3 GDP rose by 4.1% year-on-year, building on a 2.7% growth recorded in Q2.

Potential Risks Ahead

However, the MAS cautioned that 2025 may pose challenges for Singapore's trade-dependent economy. Heightened global uncertainties, including the outcome of the upcoming U.S. presidential election, escalating geopolitical tensions, and a potential slowdown in China, could adversely impact global trade dynamics. Additionally, the sustainability of the AI-driven global tech cycle recovery remains uncertain.

Inflation Trends and Outlook

Despite a slight rise in annual inflation to 2.8% in September—up from a two-and-a-half-year low of 2.5% in July—the MAS maintains that core inflation is expected to ease to around 2% by the end of the year. The authority anticipates core and headline inflation to average between 1.5% and 2.5% in 2025, suggesting a balanced inflation outlook moving forward.