SINGAPORE: The Ministry of Trade and Industry (MTI) has announced that Singapore’s gross domestic product (GDP) growth forecast for 2024 will remain at 1% to 3%.

Analysts say that this decision reflects the performance of Singapore’s economy in the first quarter of the year, alongside the latest global and domestic economic developments.

In the first quarter of 2024, Singapore’s economy saw a year-on-year growth of 2.7%, continuing the 2.2% expansion from the previous quarter. This growth was largely driven by robust performances in the finance and insurance, transportation and storage, and wholesale trade sectors.

Since the MTI’s Economic Survey of Singapore in February, the global economic environment has shown resilience.

Notably, the global economic landscape saw encouraging growth, particularly in powerhouse economies like the US and China, surpassing earlier predictions, propelled by robust domestic and external demand, respectively.

To top this off, regional economies like South Korea and Taiwan benefitted from the global recovery in electronics, especially with high demand for artificial intelligence (AI)-related chips.

Global outlook

The global GDP growth in major economies is anticipated to slow down in the near term due to tight financial conditions. However, recovery is expected later in the year as policy rate cuts are implemented.

In the US, there’s been a slight improvement in growth prospects, thanks to a strong job market and increased investments in artificial intelligence. However, despite the robust economic performance in the first quarter, the Federal Reserve might delay rate cuts due to persistent inflation.

While high interest rates may temporarily affect the US economy, it’s anticipated that easing monetary policies later in the year will stimulate growth.

In Asia, China’s GDP growth is forecasted to surpass earlier expectations, largely due to additional government support measures. These measures include significant investments in strategic manufacturing sectors and infrastructure. Recent efforts to stabilise the property market are also expected to contribute to a modest consumption recovery in the latter part of the year.

In Southeast Asia, GDP growth is expected to be sustained by strong domestic demand, ongoing recovery in tourism, and increased external demand. However, there are risks looming in the global economic landscape.

Geopolitical tensions, particularly in the M...