National Accounts Estimates - September 2023 Issue
Highlights
Year 2022
1. GDP at market prices grew at a higher rate of 8.9% in 2022 compared to 3.4% in 2021 and GVA at basic prices expanded by 9.9% in 2022, higher than the 4.0% growth in 2021.
Year 2023
GDP growth rate
2. Based on new information gathered on key sectors of the economy and policy measures announced in the Budget Speech 2023/2024, particularly those relating to public sector investment projects (Metro Express, road network, drain infrastructure, social housing, etc.):
- GDP at market prices in 2023 would grow by 6.8% instead of 5.3% as forecasted in June 2023; and
- GVA at basic prices in 2023 would grow by 6.7% instead of 5.2% as forecasted in June 2023.
3. Main contributors to the 6.7% growth in GVA at basic prices would be: “Accommodation and food service activities" (1.6 percentage points), “Construction" (1.5 percentage points), “Financial and insurance activities" (0.7 percentage point), and “Manufacturing", “Wholesale & retail trade; repair of motor vehicles and motorcycles" and “Transport and storage" each contributing 0.4 percentage point.
4. The main assumptions used are as follows:
- (a) Sugarcane: a local sugar production of 220,000 tonnes, resulting in a further drop of 6.1% after the contraction of 10.6% in 2022.
- (b) Other agriculture: to grow by 5.0% compared to 7.3% in 2022.
- (c)Manufacturing: to grow by 3.3%, lower than the 9.1% growth in 2022, assuming growths in 'food processing' (4.4%) and 'other manufacturing' (7.5%).
- (d) Construction: to grow at a higher rate of 28.6% compared to 1.3% in 2022, based on ongoing and upcoming public sector projects (extension of Metro Express, expansion of road network, implementation of drain infrastructure projects, construction of social housing units including infrastructural works and other public buildings) and private sector construction projects (Biotechnology Park, development of smart cities, land parcelling projects, property development scheme projects and construction/renovation of hotels).
- (e) Wholesale & retail trade; repair of motor vehicles and motorcycles: to grow by 3.6%, higher than 3.0% in 2022.
- (f) Transportation and storage: to grow by 8.9% compared to 5.2% in 2022.
- (g) Accommodation and food service activities: to expand by 25.7%, based on expected tourist arrivals of around 1,300,000 in 2023 compared to 997,290 in 2022.
- (h) Information and communication: to grow by 4.0%, the same rate as in 2022.
- (i) Financial and insurance activities: to grow by 5.0% compared to 4.2% in 2022.
- (j) Professional, scientific and technical activities: to grow by 5.5%, lower than the 5.1% growth in 2022.
- (k) Public administration and defence; compulsory social security: to grow at a lower rate of 2.5% compared to 5.7% in 2022.
Consumption and Saving
5. Final consumption expenditure of households and general government would grow by 2.2% in 2023 against 3.9% in 2022. Gross Domestic Savings (GDS) as a percentage to GDP at market prices for 2023 would reach 17.3 from 14.0 in 2022.
Investment
6. Investment, as measured by the Gross Fixed Capital Formation (GFCF), would grow by 19.8% in 2023, after a growth of 7.8% in 2022. Exclusive of aircraft and marine vessel, it would grow by 19.3% compared to 7.2% in 2022.
7. Private sector investment is expected to grow by 14.5% in 2023 compared to the 9.6% growth in 2022 and public sector investment would expand by 40.9% in 2023, higher than the 1.1% growth in 2022.
8. Investment rate, defined as the ratio of GFCF to GDP at market prices would increase to 22.0% in 2023, from 19.7% in 2022. Exclusive of aircraft and marine vessel, the rate would be 21.8% compared to 19.7% in 2022.
9. Private investment rate would increase to 16.8% in 2023 from 15.8% in 2022 and public investment rate would increase to 5.1% in 2023 from 3.9% in 2022.
10. The share of private sector investment in GFCF is expected to decrease to 76.7% in 2023 from 80.1% in 2022, while that of the public sector would increase to 23.3% from 19.9% in 2022.
