Monetary Authority of Singapore Forecasts Positive Economic Trends Amidst Resilient Global Growth
The Monetary Authority of Singapore (MAS) has upgraded its growth expectations for 2024, projecting that the country’s growth will strengthen to “around its potential rate,” with the output gap expected to close by the end of the year.
In its half-yearly macroeconomic review, MAS indicated that Singapore’s full-year GDP growth for 2024 is forecasted to be between 1% and 3%, as the economy moves towards its pre-pandemic growth rates. The output gap—the difference between actual and potential economic output—was initially expected to remain slightly negative, but the MAS now anticipates that it will narrow and close as the year progresses.
The output gap reflects unused capacity in the economy due to weaker demand, and its closure signals that the economy is operating closer to its full potential. This aligns with the resilient global economic growth anticipated for this year, providing an optimistic outlook for Singapore’s growth trajectory.
Although Singapore’s potential growth rate has not been officially specified by MAS, it is generally believed to be around 2% to 3%. The expectation of growth strengthening is in line with MAS’s earlier statements about the narrowing of the negative output gap. The central bank has been forecasting that economic capacity will continue to improve, leading to stronger growth as 2024 progresses.
