What drove Singapore’s upgrade from 1.0-3.0 to 2.0-3.0?

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Singapore's Economic Growth Forecast Raised to 2.0-3.0 Per Cent

Singapore has upgraded its economic growth forecast for the current year to a range of 2.0-3.0 per cent, a revision from the earlier projection of 1.0-3.0 per cent. This upward adjustment was primarily driven by a stronger-than-anticipated performance in the second quarter, coupled with growing optimism regarding a gradual recovery within the manufacturing sector.
Stronger Second Quarter Performance

The nation's economy demonstrated robust growth in the second quarter, expanding by 2.9 per cent on a year-on-year basis. This figure surpassed initial estimates of 2.7 per cent, contributing significantly to the revised outlook. This performance followed a 3.0 per cent expansion recorded in the preceding three-month period.
Optimism for Manufacturing Sector Recovery

A key factor underpinning the upgraded forecast is the anticipated gradual recovery in Singapore's manufacturing sector. While manufacturing output contracted by 1.0 per cent year-on-year in the second quarter, largely due to weaker performance in pharmaceuticals, this contraction was less severe than the 1.7 per cent shrinkage observed in the first quarter. The ministry's outlook suggests a positive trajectory for this vital economic pillar.
Resilient External Demand Outlook

Despite potential headwinds, Singapore's external demand is expected to remain resilient for the remainder of the year. While demand from the United States is projected to ease gradually due to slowing consumption, and China's economy is forecast to expand at a slightly slower pace, positive developments are anticipated in other regions. Growth in the eurozone is expected to improve, and key Southeast Asian economies are tipped for a slight pickup.
Acknowledged Potential Headwinds

The trade ministry has also acknowledged potential risks that could impact the economic outlook. These include the possibility of intensified geopolitical and trade conflicts. Furthermore, tighter financial conditions could potentially trigger market volatility or expose latent vulnerabilities within banking and financial systems.

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What drove Singapore’s upgrade from 1.0-3.0 to 2.0-3.0?

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