Singapore’s third-quarter GDP growth exceeded forecasts thanks to strong chip demand

The commerce department said it saw growth of “about 3.5%” in 2024, above the top of the government’s previous estimate of 2.0-3.0%.

The economic performance of this Asian city-state is often considered a barometer of the global environment because of its heavy dependence on international trade.

The ministry said the economy grew 5.4% year-on-year in the July-September period, beating preliminary estimates of 4.1% and economists’ forecasts of less than 4.0%. 0%.

This figure brought the average growth rate in the first 9 months of the year to 3.8%, causing the Ministry to raise its outlook for the whole year.

This is the second upgrade this year after officials in August raised their forecast to 2.0-3.0% from 1.0-3.0%.

“Growth in the third quarter was mainly driven by the manufacturing, wholesale trade, finance and insurance sectors, supported in part by the upturn in the global electronics cycle,” the ministry said. .

Manufacturing, the mainstay of the economy, grew 11.0% year-on-year, reversing a 1.1% decline in the previous quarter.

The craze for all things artificial intelligence has boosted demand for computer chips, a key export for Singapore.

“The electronics cluster grew strongly, supported by strong demand for smartphone and personal computer semiconductor chips, although demand for industrial and automotive semiconductor chips remained,” the ministry said. still weak”.

According to the ministry, major export markets such as the United States and the euro zone, as well as several economies in the region, performed better than expected in the third quarter.

However, the ministry expects 2025 growth to be at 1.0-3.0% due to growing global economic uncertainties, including “uncertainty about U.S. policies.” incoming US administration, with risks tilted to the downside.”