Singapore’s economy slowed sharply from 3.6 percent in 2022 to 0.4 percent (yoy) in Q1 this year driven by a sharp decline in manufacturing output. The manufacturing sector contracted by 5.4 percent (yoy) in Q1, reflecting a cyclical downturn in the electronic cycle. The service sector remained strong, thanks to the return of tourists and relatively resilient private consumption. The construction sector continued to recover as the return of foreign workers, following the reopening, eased the supply constraint.

Inflation came in at 6.1 percent in 2022, on the back of high energy and food prices and higher costs of transportation and accommodation. Although inflation has moderated in recent months, it is expected to remain elevated in the near term, as service inflation has been gaining momentum in recent months, reflecting a relatively tight labor market.

These conclusions are highlighted in the 2023 Annual Consultation Report on Singapore.