Prudent stance: Stacked shipping containers at the port stand in Singapore. The MAS has cautioned on the outlook for global growth and potential upside risks to prices. — Bloomberg
SINGAPORE: Singapore’s economic growth beat estimates in the last three months of 2024 but slowed from the prior quarter, potentially providing scope for the central bank to slightly loosen monetary settings this year.
Gross domestic product (GDP) grew 4.3% in the three months through December from a year earlier, according to advance estimates released yesterday by the Trade and Industry Ministry.
That beat the median analyst estimate of a 3.8% gain, although it slowed from the 5.4% growth in the July to September period.
On quarter, the economy grew 0.1% against median expectations for a 0.8% drop.
The government didn’t provide an outlook for 2025 growth, although it said in November it expects the economy to rise 1% to 3% this year.
Bloomberg Economics estimated this year’s expansion at 2.5%, as Singapore’s resilience could be tested by offshore factors ranging from China’s slowdown to trade tensions stirred by the incoming Trump administration and other geopolitical fissures.
“The more challenging outlook for growth in 2025 and beyond, in combination with heightened uncertainty, could see the central bank scale back its tightening by reducing the pace of appreciation in the Singapore dollar versus the currencies of its main trading partners,” Bloomberg economist Tamara Henderson said in a note after the data.
The city-state, she said, is in a sweet spot as headline and core inflation are both back below 2%. Singapore’s equity benchmark rose as much as 0.2% in early trading after the data, with the gauge about 1% away from hitting a record high.
Separately, Singapore private home prices rebounded, with private residential prices rising 2.3% in the last quarter from the prior three months, according to preliminary estimates from the Urban Redevelopment Authority.
That reversed a 0.7% drop in the third quarter, and is the largest increase in a year.
For the full year, Singapore GDP rose 4%, as announced by Prime Minister Lawrence Wong in his New Year’s message earlier this week.
That was the fastest pace in three years and surpassed the government’s revised estimate of around 3.5%, building a strong foundation for the city state to confront challenges in 2025.
Wong’s speech on Dec 31 flagged both rising global tensions and, in many countries, “a deep sense of angst and anxiety” about the future.
“Singapore is not immune from these global mood shifts and pressures,” Wong said. Still, “we remain a beacon of safety, security and stability in a troubled world.”
The Monetary Authority of Singapore (MAS), which left settings on hold for a sixth straight review in October, said at the time that the country’s disinflation trajectory is “well-entrenched” and the economy’s recovery will extend into 2025.
However, it cautioned then on the outlook for global growth and potential upside risks to prices.
The MAS, which uses the exchange rate rather than interest rates to control price growth, is scheduled to decide on monetary settings this month. — Bloomberg
