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Singapore economy grows more than expected

SINGAPORE (AFP) – Singapore’s economy grew more than expected last year but much slower than in 2021, official data showed yesterday, as analysts warned of weaker growth ahead owing to an expected recession in key markets.

While the 3.8 per cent on-year expansion was welcome, it was weighed by a three per cent contraction in the key manufacturing sector in the final three months.

Growth in the fourth quarter came in at 2.2 per cent, sharply down from 4.2 per cent in July-September, according to advance estimates by the Trade Ministry.

Exports for computer chips and other products have been hit by softer global demand caused by surging inflation and sharp increases in interest rates.

The city-state’s economic performance is often seen as a useful barometer of the global environment because of its reliance on trade with the rest of the world.

A pilot boat sails past container vessels at Pasir Panjang port terminal in Singapore. PHOTO: AFP

Last year’s growth beat the 3.5 per cent expected by the government but was half the 7.6 per cent rise enjoyed in 2021.

“While the slight outperformance suggests some resilience in economic activities for now, the overall trend remains on the downside,” market analyst at online trading firm IG Yeap Jun Rong said in a note.

Research house Capital Economics said it expects exports to fall further on expectations the global economy would enter a recession this year.

“Elevated interest rates, declining household savings and high inflation are likely to drag on domestic demand,” it added.

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