(Bloomberg) -- Singapore's economy expanded by a slightly more modest pace than initially expected in 2023, as manufacturing activity contracted and services growth slowed.
The final 1.1% gross domestic product reading from the Ministry of Trade and Industry on Thursday compares with the 1.2% advanced estimate and the 1.1% median forecast in a Bloomberg survey of analysts.
For the fourth quarter, GDP expanded 2.2% year-on-year, accelerating from 1% in the previous three-month period.
The trade-reliant city-state was hit hard by tepid demand in the US and China, dragging down its manufacturing and services sectors. Exports and factory activity contracted for most of last year. A boom in construction provided some support to economic growth.
The latest growth figures comes ahead of Finance Minister Lawrence Wong's budget speech for the 2024 fiscal year on Friday. Singapore is expected to pour spending into measures aimed at defraying higher living costs, retraining retrenched workers and boosting the competitiveness of Singapore as an investment destination.
Singapore's economic growth is expected to accelerate this year amid improved global trade, especially the resurgent demand for electronics. Lower inflation should also support private consumption. The government maintained its forecast for the economy to expand 1%-3% this year.
Still, monetary authorities will be keeping an eye out on geopolitical tensions that could yet cause supply shocks and stoke price pressures. The central bank kept policy settings unchanged in January and said it remains vigilant to inflation and growth risks.
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