SINGAPORE – The Government has narrowed its economic growth forecast range for 2022 in tandem with a worsening outlook for the global economy and stubbornly high inflation.

The Ministry of Trade and Industry (MTI) narrowed its range for Singapore’s gross domestic product (GDP) growth this year to 3 to 4 per cent, from an earlier projection of 3 to 5 per cent.

The cut in the outlook takes into account the performance of the Singapore economy in the first half of the year, as well as the latest global and domestic economic developments, MTI said on Thursday (Aug 11).

The economy grew by 4.4 per cent on a year-on-year basis in the second quarter, taking the first half growth to 4.1 per cent, the ministry said in the second-quarter 2022 Economic Survey of Singapore.

The pace of growth was less than the 4.8 per cent MTI had projected in July, though faster than the 3.8 per cent achieved in the first quarter.

On a quarter-on-quarter seasonally-adjusted basis, the economy contracted slightly by 0.2 per cent, a reversal from the 0.8 per cent expansion in the first quarter and a worse outcome when compared to MTI’s earlier estimate of zero per cent.

Mr Gabriel Lim, permanent secretary for Trade and Industry, said the global economic environment has deteriorated further since the last projections were made.

“Stronger-than-expected inflationary pressures and the more aggressive tightening of monetary policy in response are expected to weigh on growth in major advanced economies,” he said.

“Against this backdrop, the growth outlook for some outward-oriented sectors in the Singapore economy has weakened,” he noted.

The survey showed the manufacturing sector expanded by 5.7 per cent year-on-year in the second quarter, extending the 5.5 per cent growth in the previous quarter.

Growth in the construction sector picked up to 3.3 per cent year-on-year, from the 2.4 per cent registered in the previous quarter.

Meanwhile, the wholesale trade sector grew by 1.9 per cent year-on-year, slower than the 4.8 per cent growth achieved in the first quarter.