Can Singapore Keep Cheating Recession In 2024?
(MENAFN- Asia Times) Highly trade-dependent economies like Singapore will be hardest hit by these monetary tightening measures. Singapore's trade-to-GDP ratio was 336.86% in 2022, an increase of 3.52% from 2021.
Since October 2022, Singapore's export-led manufacturing sector, which comprises approximately 20-25% of its GDP, has remained subdued due to the decrease in global demand.
After a pandemic-fuelled boom, demand for consumer Electronics has tapered off US-China trade disputes and other geopolitical uncertainties have also adversely impacted Singapore's Semiconductor industry.
The woes of the semiconductor industry have already taken a toll on the manufacturing sector overall, which shrank by 2.6% year-on-year in the fourth quarter of 2022. But the drop in manufacturing output eased to 2.1% year-on-year in September 2023 from an 11.6% decline in August 2023.
One of the key reasons is the demand for artificial intelligence, which has seen output in the electronics sector rise by 12.7% year-on-year in September 2023 and 14.8% in October 2023. The continuing US-China chip war has also seen Western chipmakers and suppliers moving to increase their production bases in Singapore.
As Singapore's purchasing manager's index heads back into positive territory, this could indicate a more positive outlook for the sector heading into 2024. The banking and finance sector has a total asset size of approximately US$2 trillion and serves a critical role in financing the growth of trade and infrastructure.
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