The above-mentioned factor prompted the IMF to reduce Singapore's GDP growth outlook for 2023 to 1.5% from a 2.3% projection issued last October, he told a news briefing on the IMF's latest global growth forecasts.

The forecast for ASEAN-5, namely Singapore, Malaysia, Vietnam, Indonesia and the Philippines, was cut to 4.3% from 4.5%. The group's 2024 economic growth is predicted to go down by 0.2 percentage point to 4.7%.

A cargo vessel at Pasir Panjang Terminal of Singapore

Daniel Leigh, chief of the research department at the IMF said ASEAN is unlikely to maintain its growth pace as in 2022, with a rate of 5.2% while noting the surprising speed with China's reopening this year. However, he noted that geopolitical fragmentation remains negative for everyone, although some economies benefit from supply chains relocating out of China.

Earlier on the same day, the IMF released its World Economic Outlook report, which raised its forecast for global economic growth in 2023 due to a "surprising recovery" in demand in the U.S. and Europe, declining energy costs, and China's reopening.

It believes global growth will fall from 3.4% in 2022 to 2.9% in 2023, but still higher than the 2.7% predicted in October 2022. It also revised its forecasts for a number of major economies such as the U.S., the Eurozone, the U.K., China and India. The U.K. is the only major developed economy that is predicted to be in recession this year, with GDP to shrink 0.6% as households struggle to cope with rising costs of living.

Source: VNA