Singapore’s economic growth in 2024 exceeded expectations
After seasonal adjustment, the economy grew by 0.1% quarter-on-quarter in the fourth quarter of 2024, lower than the 3.2% quarter-on-quarter growth in the third quarter. Singapore’s Ministry of Trade and Industry expects economic growth to slow to between 1% and 3% in 2025.
In the fourth quarter of 2024, Singapore’s manufacturing output increased by 4.2% year-on-year. Although it continued the 11.1% increase in the third quarter, the growth rate dropped significantly; the output value of the construction industry increased by 5.9% year-on-year, faster than the 4.7% growth in the previous quarter; the output value of the service industry increased by 4.3% year-on-year, slightly better than the 4% growth rate in the third quarter. From the perspective of the full-year performance, the output value of all industries has increased, with the output value of the manufacturing industry increasing by 3.5%, the output value of the construction industry increasing by 4.8%, and the output value of the service industry increasing by 4.1%.
In 2024, the first quarter increased by 3.0%, the second quarter increased by 2.9%, the third quarter increased by 5.4%, and the fourth quarter increased by 4.3%. The economy is highly dependent on the external environment and foreign trade, and is greatly affected by factors such as global geopolitical games and unstable external consumer demand.
Singapore’s economic growth rate in 2024 is better than expected, mainly due to the following aspects:
First, the recovery of the manufacturing industry. Compared with the previous year, the quarterly manufacturing output value fell by 1.7% in the first quarter, increased by 0.5% in the second quarter, increased by 11.1% in the third quarter, and increased by 4.2% in the fourth quarter. Although the output values of manufacturing orders, exports, output and inputs vary and fluctuate from month to month, the manufacturing industry as a whole shows an expansionary state. The electronics industry, which accounts for nearly half of the manufacturing output value, is the main driving force for the overall growth of the manufacturing industry.
Second, the performance of the service industry is generally normal. Compared with the previous year, the quarterly output value of the overall service industry increased by 4.3% in the first quarter, 3.3% in the second quarter, 4.0% in the third quarter, and 4.3% in the fourth quarter. In the service industry, especially financial insurance, information and communications, transportation and warehousing, wholesale trade, tourism and professional services, continue to make important contributions to economic growth.
Third, the growth of the construction industry is stable. Compared with the previous year, the output value of the construction industry increased by 4.1% in the first quarter, 4.3% in the second quarter, 4.7% in the third quarter, and 5.9% in the fourth quarter. The construction industry continued to maintain rapid growth, mainly driven by factors such as public sector construction projects and increased demand. Continuous projects in the public and private sectors supported the growth of the industry.
Fourth, the employment market is expanding steadily. According to the data from the Labor Market Report for the third quarter of 2024 released by the Singapore Ministry of Manpower, the number of employed people increased by 4,700 in the first quarter, 11,300 in the second quarter, and 22,300 in the third quarter. The total number of local employment has increased for 12 consecutive quarters, totaling 3,736,900. Among the new labor force, local residents are mainly distributed in finance, insurance services, information and communications, public administration, medical and social services, and education. The local economic growth momentum is good, driving the expansion of the labor market.
Recently, institutions such as United Overseas Bank, Citigroup and Nomura Holdings have successively released their economic outlooks for 2025, believing that given the uncertainty of the policies of the new US government, Singapore’s economic growth in 2025 will be slower than in 2024, and the growth rate will be between 2.5% and 2.8%.