The Singapore economy will face a stronger economic downturn in 2024, especially as the global economic slowdown intensifies and Singapore’s economic growth has stalled in the first half of 2023.
As the global economic slowdown becomes more pronounced, Singapore households and businesses are likely to spend more cautiously. Investment is also likely to be dampened as companies hold off on new borrowing in anticipation of easing by central banks in advanced economies. Another pressure on the economy is that rising wages have yet to bridge the gap with the rising cost of living, limiting discretionary spending. The renewed pressure on food prices from El Nino, coupled with an additional 1% increase in the goods and services tax in January, is likely to keep inflation above 3% for most of 2024.