Singapore’s economy expanded by 0.3 per cent in the second quarter of 2023 from the previous three months, narrowly avoiding a technical recession or two consecutive quarters of contraction.
Gross domestic product (GDP) also grew 0.7 per cent year on year (y-o-y) in the April-June period, according to advance estimates from the Ministry of Trade and Industry (MTI) on July 14, 2023.
In the first quarter of 2023, the economy had grown by 0.4 per cent y-o-y, slowing from the 2.1 per cent expansion in the previous quarter. On a quarter-on-quarter (q-o-q) seasonally adjusted basis, it shrank 0.4 per cent, a reversal from the 0.1 per cent growth in the fourth quarter of 2022.
The q-o-q contraction in the first three months of the year, amid weak external demand for Singapore’s exports, had raised the spectre of a technical recession.
MTI said that growth in the second quarter was again weighed down by the trade-driven manufacturing sector, which contracted further on weakness in the global economy and the electronics down cycle. In addition, there is little hope for an imminent strengthening of China’s placid recovery. Ms Selena Ling, chief economist and head of treasury research and strategy at OCBC Bank, noted that the preliminary indications from the June forward-looking economic indicators for China suggest a further deceleration in growth momentum.
By Q3, some economists believe the export-oriented manufacturing sector could ease into a “fragile” recovery, beginning with positive sequential growth.