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By Xinghui Kok
SINGAPORE (Reuters) – Singapore’s economy grew faster than initially estimated in the third quarter, helped by a resurgence in tourism and facilities activity, and the government warned of dangers to the outlook due to inflation and geopolitics.
Gross domestic product (GDP) grew 1. 1% year-on-year, government data showed on Wednesday, higher than initial estimates of 0. 7% released last month.
On a seasonally adjusted quarterly basis, gross domestic product grew by 1. 4% between July and September, with estimates of 1%.
The Ministry of Commerce reduced GDP expansion to around 1. 0% in 2023 from the bottom of the 0. 5% to 1. 5% range.
It forecasts GDP expansion in 2024 to be between 1. 0% and 3. 0%.
“The better-than-expected GDP expansion in the third quarter confirms that the economy is on track for a stronger recovery in 2024,” said Chua Hak Bin, an economist at Maybank.
Chua added that the upward revision of the preliminary estimates was due to innovations in the sector, with the expansion of the monetary and accommodation and retail industries supported by buoyant tourist arrivals.
Gabriel Lim, permanent secretary for policy at the Ministry of Trade and Industry, told a press convention that dangers to the global economy remain.
“First, persistent core inflation in complex economies may simply prompt central banks to keep existing peak interest rates alive longer,” Lim said. “Second, an escalation or widening of the Israel-Hamas clash or the war in Ukraine may simply lead to further supply disruptions and commodity price shocks. “
The trade-dependent economy narrowly avoided a technical recession – explained as two consecutive quarterly contractions – by posting modest GDP expansion in the second quarter.
While industry knowledge shows that exports have increased in recent months, non-domestic oil exports have fallen for thirteen consecutive months.
In October, the central bank left its financial policy unchanged as inflation in the city-state moderated from a peak of 5. 5% in January to 3% in September. He said this reflected a subdued economic outlook in the near term, but was expected to be moderate in the second half of 2024.
Edward Robinson, deputy director-general of the Monetary Authority of Singapore, said at the press conference that existing financial policy parameters are adequate and that the bank expects domestic interest rates to be in line with global interest rates.
(Reporting via Xinghui Kok; editing by Mark Heinrich)