Singapore has upgraded its economic outlook for 2024 as its third quarter (3Q24) GDP growth beat expectations and initial estimates, helped by stronger semiconductor production and engineering demand, as reported by Reuters.

GDP rose 5.4% year-on-year in 3Q24, government data showed, faster than the 4.1% official advance estimate released last month and a median forecast of 4.6% in a Reuters poll of economists.

The trade ministry also raised its GDP growth forecast for 2024 to 3.5% from a previous range of 2% to 3%.

"We are not ruling out that the number could be higher than 3.5%," Beh Swan Gin, permanent secretary at the trade ministry, said.

GDP for the July-September quarter was also higher than the annual growth of 3% in 2Q24. On a quarter-on-quarter, seasonally adjusted basis, GDP expanded 3.2% in the July to September period, higher than both the advance estimate of 2.1% and 2Q24 growth of 0.5%.

Beh said the higher-than-expected 3Q24 GDP was due to demand for semiconductors that spilt over to the precision engineering industry with a higher output of industrial machinery and semiconductor equipment.

The trade ministry said it expects growth of 1% to 3% in 2025, adding that global economic uncertainties have increased, including uncertainty over the policies of the incoming US administration.

"If tariff hikes happen...there will be renewed inflationary pressures, which could disrupt the pace of monetary policy easing and keep financial conditions tighter for longer in the US," said Beh.

The Monetary Authority of Singapore left monetary policy settings unchanged last month in its last review of the year as inflation pressures continued to moderate and growth prospects improved. The next policy meeting is in January.