World Economic Growth Projection 2023: Singapore set to outstrip United States and European Union

World Economic Growth Projection 2023: Singapore set to outstrip United States and European Union by 2.3X and 4.6X respectively.

Prospects, Savills’ Asia Pacific Research Publication reports that Singapore is set to outperform the United States (US) and European Union (EU) by 2.3 times and 4.6 times respectively, based on International Monetary Fund’s World Economic Growth Projection for 2023.

The real Gross Domestic Product growth (annual percentage change) for Singapore is 2.3%, compared to the projections for US (1.0%) and EU (0.5%). Notably, Asian economies such as China, Vietnam, Indonesia and India are forecasted to lead global growth.

Rising inflation and recession in the US and Europe are casting a shadow over global real estate markets and Asia Pacific has not been immune to these same forces pummelling other regions. However, with stronger growth prospects and the sheer diversity of Asia’s economies and cities, there are pockets of positivity. Prospects highlighted Singapore as one of them.

“In general, Singapore’s real estate market should be in a good position to ward off the ill-effects of global economic problems and global political tensions. The main reason for the market possessing this fortitude is the relative lack of supply for most sectors, and for residential properties, it comes from developers strong financial holding power. Together, the market could overcome the effects of higher interest rates and economic slowdown.” says Alan Cheong, Executive Director of Savills Singapore Research and Consultancy.

Singapore's real estate market is one of the world's most resilient, recording $9.1 billion of real estate investment deals in the first three quarters of 2022, up an astonishing 47% from the same period in 2021 (based on MSCI Real Assets figures). The residential rental sector is also booming, with the rental index for all private residential properties jumping 8.6% quarter-on-quarter in Q3/2022, the highest quarterly increase for 15 years (according to Urban Redevelopment Authority).

Additionally, Savills Research reports that Singapore’s CBD Grade A offices will continue to see rents rising and vacancies falling, despite the global economic slowdown and problems afflicting the technology sector.

Rents for prime warehouse & logistics properties properties also rose 2.8% in Q3/2022 and Savills Research predicts that rents will rise by 2% to 5% year-on-year in 2023.

“Notwithstanding global economic problems, local industrial and warehouse rents are expected to rise in 2023,” adds Mr. Cheong.

Read the full Prospects article here.