SINGAPORE ECONOMIC OVERVIEW Following a moderate growth of 3.8% in 2022, Singapore’s economic growth continued to slow in 2023. Accounting for global factors, the Ministry of Trade and Industry Singapore (MTI)1 reported that Singapore’s GDP expanded by 1.1% YoY in 2023. The slower growth was attributed to the ongoing geopolitical tensions such as the conflicts in Gaza and Ukraine, as well as tensions between US and China. However, despite the uncertain geopolitical environment, elevated interest rates and the pressure of higher domestic costs, Singapore was able to avoid a recession. Furthermore, inflation started to gradually come down. Overall unemployment rate stood at 1.9%2 in 2023, a slight improvement from 2.1% in 2022. Total population stood at 5.9 million, a 5.0% increase from the preceding year. Services producing industries registered growth of 2.3% for 2023. All sectors within the services producing industry expanded, the growth was mainly driven by the Accommodation (12.1%) and Information & Communications (5.7%). The significant growth observed in the Accommodation subsector was primarily due to the rebound in tourist arrivals, accumulating a total of 13.6 million visitors in 2023. This denoted a remarkable rise of 115.8% on a YoY basis when contrasted with the data from 2022. In the same period, some of the better performers included the Real Estate (4.9%), Other Services Industries (4.4%) and Food & Beverage Services (4.1%) sectors. The goods producing industries contracted by 2.9% in 2023. Despite an overall contraction of 4.3% for 2023, the manufacturing sector recorded a 1.4% expansion YoY in 4Q 2023, a turnaround from the 4.9% contraction in the previous quarter, as a result of expansions in output across all clusters, except for precision engineering cluster. The construction sector saw a growth of 5.2% in 2023, a 0.6 percentage point increase from 2022. This was due to an increase in output for both the public and private sectors in the fourth quarter, recording an expansion of 5.2% YoY in 4Q 2023. SINGAPORE To increase public spending, the government has raised the Goods and Services Tax (GST) progressively from 8% to 9% from 2023 to 20243. To cope with higher inflation and cushion the impact of GST increase, the government has been rolling out a comprehensive set of support measures announced at Budget 2023. These support measures have since been enhanced in September 2023. Providing increased cash payments through the Assurance Package cash special payments and additional S$200 CDC vouchers for every Singaporean Household in 2024 are among the enhancements. Going forward, despite a lower GDP growth in 2023 and an uncertain global economic outlook due to rising geopolitical tensions, Singapore’s economy is poised to remain healthy moving into 2024. MTI forecasted that Singapore’s GDP will grow between 1.0% and 3.0% in 2024, adding that major global economies will likely slow in the first half of the year, before picking up in the second half of the year. Singapore Tourism Overview With the continued easing of travel restrictions and reopening of international borders, the Singapore TourismBoard (STB) reported 13.6 million international arrivals in 2023, which is approximately two times higher than total arrivals in 2022. Tourism receipts are estimated to reach S$24.5-S$26.0 billion, surpassing STB’s forecast of S$18.0-S$21.0 billion set out in 2023. The average length of stay for visitors in 2023 was 3.8 days. While the tourism sector has seen a return of international visitors to Singapore, the visitor levels remained 29% lower in comparison with 2019. 1 Ministry of Trade and Industry 2 Labour Market Advance Release, 4Q 2023 3 GST has been raised to 9%, effective on 1 January 2024 Source: CBRE, Singapore Tourism Board, 2024 INTERNATIONAL VISITOR ARRIVALS (MILLIONS) 20 18 16 14 12 10 8 6 4 2 0 2023 2019 2022 2021 2020 92 CAPITALAND INTEGRATED COMMERCIAL TRUST INDEPENDENT MARKET REVIEW
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