International News 16/02
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Singapore's economy grew by 2.2% in Q4 2023, which was lower than expected.
Singapore's economy grew by 2.2% on an annualized basis in Q4 2023, which was lower than the previously forecasted 2.8% growth. However, on a quarter-on-quarter basis, GDP increased by 1.2% in the October-December period, lower than the initial estimate of 1.7%. The Ministry of Commerce maintained its GDP growth forecast for 2024 at 1.0% to 3.0%. The services sector, along with information and communication and transportation and storage, drove GDP growth in 2023. The Monetary Authority of Singapore (MAS) has decided to maintain its current monetary policy, citing a reduced inflationary pressure and an improved growth outlook. In December, core inflation decreased to 3.3% from its peak of 5.5% at the beginning of last year. Additionally, starting in 2024, the MAS will conduct quarterly reviews, which is an increase from the current bi-annual reviews.
Japan's economy contracted unexpectedly in Q4 2023.
In Q4 of 2023, Japan's economy contracted by 0.4% on an annualized basis, following a contraction in the previous quarter. Weak demand in the clothing and dining sectors led to a decrease in private consumption, resulting in a quarterly decline of 0.1%. This figure was unexpected, as economists had predicted a 0.3% increase. Private consumption, which accounts for over half of the economy, fell by 0.2% instead of the expected 0.1% increase. These unexpected contractions raise concerns about the strength of Japan's economy and its ability to recover from the impacts of the ongoing COVID-19 pandemic.
The UK inflation rate remained at 4% in January 2024, defying expectations of an increase.
UK consumer price inflation remained at a rate of 4.0% in January 2024, surprising economists who had predicted a rise to 4.2%. Core inflation, which excludes certain items, also remained unchanged at 5.1%. However, services inflation, a measure of domestic price pressures, increased to 6.5% from 6.4% in December. The Bank of England closely monitors services inflation when considering changes to interest rates. Following the release of the inflation data, the value of the sterling dropped against both the dollar and euro.