The growth forecast was narrowed from an earlier range of 0.5-2.5 percent, said the MTI in its Economic Survey of Singapore Second Quarter 2023.
The survey showed that Singapore's economy grew by 0.5 percent on a year-on-year basis in the second quarter while the manufacturing sector shrank by 7.3 percent year-on-year, worse than the 5.4 percent contraction in the previous quarter.
Due to a weak external demand outlook and downside risks in the global economy, the manufacturing sector in Singapore is expected to remain weak this year, the MTI said.
The Ministry added that the growth in Singapore's finance and insurance sector is likely to be subdued as a result of continuous weakness in the external economic environment and restrictive financial conditions.
Meanwhile, the survey noted that the ongoing recovery in international air travel and inbound tourism will fuel the transport and accommodation sector. Retail trade and food service are also expected to continue expanding.
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