A woman walks along the promenade at Marina Bay in Singapore on Oct 13, 2023. (PHOTO / AFP)

SINGAPORE - Singapore's economy grew slower than initial estimates in the fourth quarter of last year, on downward revisions in construction and manufacturing but the city-state was still hopeful of a pick up in activity in 2024.

Gross domestic product (GDP) rose 2.2 percent on a year-on-year basis in the fourth quarter, government data showed on Thursday, lower than an advance estimate of 2.8 percent released last month.

Beh cited risks from the ongoing Israel-Hamas conflict and war in Ukraine, cumulative effects of monetary policy tightening on vulnerable banking and financial systems, and "idiosyncratic cost shocks disrupting the global disinflation process," which have kept financial conditions tight for longer

The fourth-quarter expansion was also below the 2.5 percent in a Reuters poll of forecasts.

On a quarter-on-quarter, seasonally-adjusted basis, GDP expanded 1.2 percent in the October-December period, compared with 1.7 percent in advanced estimates.

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The trade ministry maintained its GDP growth forecast for 2024 at 1.0 percent to 3.0 percent.

Beh Swan Gin, permanent secretary of development at the trade ministry, said manufacturing and trade-related sectors are expected to see a gradual pickup in 2024 and continued recovery in air travel and international arrivals supporting tourism and aviation-related sectors.

For the whole of 2023, GDP grew 1.1 percent, slower than the 3.8 percent in 2022.

Beh cited risks from the ongoing Israel-Hamas conflict and war in Ukraine, cumulative effects of monetary policy tightening on vulnerable banking and financial systems, and "idiosyncratic cost shocks disrupting the global disinflation process," which have kept financial conditions tight for longer.

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OCBC economist Selena Ling said there "is recognition that the recent uptick in inflation could throw the market anticipation of imminent policy pivot into disarray."

Singapore's central bank left monetary policy settings unchanged in its first review of the year as inflation pressures continued to moderate and growth prospects improved.

The Monetary Authority of Singapore (MAS) has increased the frequency of its reviews from twice a year to quarterly starting in 2024.

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Edward Robinson, chief economist of MAS, on Thursday said monetary policy remained appropriate despite "continuing uncertainties on the growth and inflation front," which he said the central bank would monitor closely.

Core inflation in December was 3.3 percent year-on-year, slowing from its peak of 5.5 percent early last year.