Singapore’s economy outpaced expectations in 2023, driven by year-end growth in manufacturing and construction, along with the resilient services sector, contributing to increased momentum in economic activity.

According to advance estimates released on Tuesday by the Ministry of Trade and Industry, the Gross Domestic Product (GDP) recorded a growth of 1.2% for the year. This surpassed the government's earlier projection of an annual expansion of approximately 1%.

The robust performance was marked by a 1.7% GDP expansion in the last quarter of the year compared to the previous quarter. On a year-on-year basis, the economy witnessed a 2.8% expansion in the last quarter.

November saw a turnaround in exports, ending 13 consecutive months of decline, while factory output registered an increase in the final months of the year, contributing to overall economic growth. Despite the relative strength in the services sector throughout the year, Prime Minister Lee Hsien Loong, in his New Year's message on Sunday, cautioned against undue optimism, highlighting risks arising from an uncertain external environment.

Lee stated, "For some years to come, we must expect the external environment to be less favorable to our security and prosperity. Geopolitical uncertainties will continue weighing on the global economy."

The government's outlook for 2024 remains unchanged, with Lee reiterating the ministry's earlier forecast that the economy is expected to grow within a range of 1% to 3%. This forecast is contingent on a sustained recovery in global trade, as exports constitute a significant portion of the island's economy.

The rebound in exports observed in November was largely attributed to a low base from the previous year.