By Ambar Warrick
Investing.com– Singapore’s economy likely expanded at a substantially slower pace in the fourth quarter of 2022, preliminary data showed on Tuesday, as high inflation and a lull in the country’s major exports took a toll on growth.
The island state’s (GDP) grew at an annual rate of 2.2% in the fourth quarter, according to an advance GDP estimate from the Ministry of Trade and Industry.
While the reading was slightly better than estimates for growth of 2.1%, it was nearly half of the 4.2% growth seen in the third quarter.
On a quarterly basis, the in the fourth quarter, much slower than the 4.6% growth logged in the third quarter.
This puts Singapore’s overall GDP for 2022 at 3.8%- half of the growth rate seen in the previous year.
The reading reflects the increased headwinds faced by the Singaporean economy in the face of slowing global trade, which has weighed heavily on the country’s key non-oil exports.
A slowdown in manufacturing was the biggest weight on the GDP, as local industries- particularly electronics, chemicals and biomedical firms- cut down output in the face of slowing global demand.
The country is seen as a major indicator of global trade conditions, given that a bulk of its economy is driven by international trade.
Singapore’s non-oil exports- a key driver of economic growth- have fallen sharply in the past two months, with COVID-related disturbances in China contributing heavily to the decline.
China is a major trading partner for Singapore, acting as an export destination as well as a facilitator of trade for the island state. A slowdown in the world’s second-largest economy on worsening COVID-19 trends has weighed heavily on Singapore and other countries with large trade exposure to Beijing.
This weakness is expected to persist in 2023, with Singaporean authorities recently forecasting that economic growth will slow in 2023.
, which is currently trending near 14-year highs in Singapore, also weighed heavily on the economy in 2022. The Monetary Authority of Singapore tightened policy several times during the year.