Singapore's GDP growth is expected to be at the lower half of the 0.5% to 1.5% forecast range in 2023: MAS

However, the country's economic growth is expected to improve gradually in the second half of 2024.

Singapore’s gross domestic product (GDP) growth is projected to be at the lower half of the 0.5% to 1.5% range that was forecasted for 2023, says the Monetary Authority of Singapore (MAS). This is in spite of the sequential pick-up in GDP in the 3Q2023 after stalling in the first three quarters of the year.

“There were signs of convergence (in y-o-y terms) among the broad clusters, with some recovery in the external-facing sectors, even as growth in the domestic-oriented sectors moderated. In the coming quarters, these adjustments are expected to continue, barring major shocks to the external economies,” the central bank added in its Macroeconomic Review published on Oct 30.

The review is published twice yearly in April and October, in conjunction with the release of the MAS monetary policy statement (MPS). The review looks at the analysis and assessment of macroeconomic developments in the Singapore economy by the Economic Policy Group (EPG) and shares with market participants, analysts and the wider public, the basis for the policy decisions conveyed in the MPS. It also features in-depth studies undertaken by the EPG as well as guest contributors, on the broader issues facing the Singapore economy.

Meanwhile, Singapore’s manufacturing sector should see a “cautious recovery” along nascent signs of stabilisation in the global electronics industry. At the same time, growth in the financial services sector seems to have “bottomed out” amid plateauing interest rates.

The travel-related and domestic-oriented sectors should see a normalisation in growth as the post-reopening boost fades off.

To this end, Singapore’s economic growth is projected to improve “gradually” in the second half of 2024. It is also expected to come in closer to its potential rate for the full year.

Meanwhile, growth for the global economy is expected to ease further into 2024. This is said to reflect, in part, the cumulative impact of the tightening of monetary policies since early 2022.

Growth is set to retract in the G3 as the lagged impact of tighter monetary policy and diminishing saving buffers are expected to increasingly weigh on economic activities. The pace of recovery in China is also expected to be weighed down by the ongoing weakness in its property market.

At the same time, Asian economies ex-Japan will see resilient domestic demand providing support.

“Following this year’s rapid global disinflation, subsequent progress will slow as overall Asia ex-Japan labour market conditions remain tight. Asia ex-Japan is closer to realising their inflation targets but will be impacted by higher oil and food prices. The outlook is subject to several risks including a sharper China slowdown, stubborn inflation, and tighter financial conditions,” reads the report.

Progress of middle-income workers could be impacted by structural shifts

Middle-income workers in Singapore could be impacted by structural shifts in the next phase of Singapore’s economic growth, notes MAS. While these workers have fared well over the past decade with 45% of workers in 2011 moving up by at least one income decile in 2021, upward income mobility was found to be strongly associated with employer-related attributes. Notably, the income of workers who moved to more productive or larger firms more than doubled over the decade.

Amid the changes in the next stage of Singapore’s economic development, the MAS found that the income growth of the broad middle class would now depend on the corporate sector’s ability to create good jobs by taking advantage of technology and scale, and an effort to reskill and upskill workers to enable them to take on more productive and well-paying jobs

“The middle class of a population is an important engine of its economic growth and prosperity. Cross-country studies have shown that economic growth is higher in countries where the middle class is strong with respect to factors such as income growth and job prospects,” says MAS in its report. In this report, the broad middle is defined as resident employees in the 21st to 80th percentile of their age cohorts.

Working from home

In MAS’s report, the economists found that most Singaporean workers prefer some degree of remote work, more so than in other countries. The share of workers who prefer to work from home has increased between 2021 and 2022.

Referring to a recent survey conducted by Pricewaterhouse Coopers (PwC), 73% of workers have indicated a high preference for a hybrid work model over the next 12 months, higher than the global average of 63%.

Survey data further shows that in Singapore, both employees and employers have a higher average desire to work from home relative to almost all other countries globally. Among Singapore’s workforce, younger individuals were found to have placed a significantly greater value on working from home.

Self-assessed productivity is another key determinant of the desire for employees to work from home. The results show that Singaporeans with higher perceived productivity place a significantly greater value on working from home. However, while beneficial to the worker there is evidence from other studies that this boost in productivity is mainly attributable to reduced commute times.

Other results found that individuals with tertiary education and a graduate degree are more likely to want to work from home by about half an extra day, while men are slightly less likely to indicate a desire to work from home than women.


Core inflation should resume a broadly moderating trend for the subsequent quarters with easing imported and domestic cost pressures keeping inflation on a downward trajectory in 2024. However, the increase in the GST rate and step-up in essential services inflation will lead to a pickup in core inflation in early 2024.

Imported inflation is expected to remain most with prices for global food commodities and manufactured goods continuing to decline. At home, the easing in labour market tightness should slow the pace of unit labour cost increases and dampen services inflation.

MAS core inflation continued to ease in the 3Q2023 with the pace of price increases slowing across a wider range of goods and services.

Notwithstanding higher electricity & gas prices leading to some volatility in inflation in the months ahead, MAS core inflation is projected to edge down to between 2.5% – 3.0% y-o-y by December. CPI-All Items inflation – or headline inflation – is forecast to pick up further in the next few months on the back of higher COE premiums and rising petrol pump prices

In 2024, MAS core inflation is expected to average between 2.5% – 3.5% while headline inflation is expected to average between 3.0% – 4.0%.

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