, Singapore
175 views
Photo by Zhu Hongzhi on Unsplash

Why the 2022 GDP growth forecast was narrowed to 3.0%-4.0%

The previous forecast was 3.0% to 5.0%.

The Ministry of Trade and Industry narrowed down its full-year GDP forecast to 3.0%-4.0% from 3.0%-5.0%, citing weakening external demand.

In a report, the MTI cited four factors affecting the outlook for Singapore's economy, and one of them is the Russia-Ukraine conflict.

According to the MTI, further escalation of the war could "worsen global supply disruptions and exacerbate inflationary pressures through higher food and energy prices."

"More persistent and higher-than-expected inflation would dampen global growth further, including through even more aggressive monetary policy tightening in many advanced economies," the MTI said.

A slowdown in major external economies could affect growth in the water transport and finance & insurance sectors, added the MTI.

The MTI said it is also weary that financial stability risks would intensify "if there are disorderly market adjustments to monetary policy tightening in the advanced economies."

"In particular, the onset of large capital outflows from regional economies with high dollar-denominated debt levels could lead to tighter financial conditions and affect growth in these economies," the MTI added.

Another reason for MTI's weakened outlook is the possible escalation of geopolitical tensions which could lead to further disruption in supply chains.

Lastly, the MTI said it still can't rule out the risks of the COVID-19 pandemic, saying there could be more virulent strains of the virus.

"The global economic environment has deteriorated further. 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," the MTI said.

READ MORE: Economy grows at faster pace in Q2

Follow the link for more news on

Join Singapore Business Review community
Since you're here...

...there are many ways you can work with us to advertise your company and connect to your customers. Our team can help you dight and create an advertising campaign, in print and digital, on this website and in print magazine.

We can also organize a real life or digital event for you and find thought leader speakers as well as industry leaders, who could be your potential partners, to join the event. We also run some awards programmes which give you an opportunity to be recognized for your achievements during the year and you can join this as a participant or a sponsor.

Let us help you drive your business forward with a good partnership!