Singapore said on Friday its economy grew more than expected in the third quarter and raised its forecast for the year thanks to strong demand from major trading partners.
The Commerce Ministry said it saw expansion of “around 3.5%” in 2024, on top of the government’s previous estimate of 2.0-3.0%.
The economic performance of the Asian city-state is often seen as a barometer of the global environment due to its heavy reliance on international trade.
According to the ministry, the economy grew by 5.4% between July and September, beating the forecast of 4.1% and economists’ forecasts of less than 4.0%.
The reading brought average growth for the first nine months of the year to 3.8%, and the ministry raised its forecast for the rest of the year.
The upgrade was the second this year after officials in August raised the forecast to 2.0-3.0% from 1.0-3.0%.
“Growth in the third quarter was driven primarily by the manufacturing, wholesale trade, and finance and insurance sectors, driven in part by the upturn in the global electronics cycle,” the ministry said.
Manufacturing, the pillar of the economy, grew by 11.0% year-on-year, reversing the 1.1% contraction experienced in the previous quarter.
The rush for all things artificial intelligence boosted demand for computer chips, a major Singaporean export.
“The electronics cluster grew strongly, supported by strong demand for semiconductor chips from smartphones and personal computers, although demand for automotive and industrial semiconductor chips remained weak,” the ministry said.
Major export markets such as the United States and the eurozone, as well as some regional economies, performed better than expected in the third quarter, according to the ministry.
The ministry, however, forecast growth in 2025 to be 1.0-3.0% due to increased global economic uncertainties, including “uncertainty over incoming US administration policies, with risks tilted to the downside.”
