SINGAPORE, May 22 — Singapore has maintained its economic growth forecast for 2025 to a range of “0.0 to 2.0 per cent,” taking into account the performance of the country’s economy in the first quarter, as well as the latest global and domestic economic situations.
The Ministry of Trade and Industry (MTI) said that, given the steps taken by major economies to de-escalate global trade tensions, the country’s external demand outlook for the rest of the year has improved slightly compared to April.
However, the growth of outward-oriented sectors in Singapore is expected to slow over the year due to global economic uncertainty.
“In particular, the United States’s (US) tariff measures are likely to adversely affect the manufacturing sector given its export exposure to the US market, as well as slowing growth in global end-markets,” it said in a statement on the release of the First Quarter 2025 Economic Survey of Singapore today.
In April, the MTI downgraded Singapore’s gross domestic product (GDP) growth forecast for 2025 to “0.0 to 2.0 per cent”, from “1.0 to 3.0 per cent,” citing significant deterioration in Singapore’s external demand outlook following the announcement of sweeping tariffs by the US and the ensuing cycle of tit-for-tat tariffs with China.
Notwithstanding the positive developments in recent weeks, the global economic outlook remains clouded by significant uncertainty, with the risks tilted to the downside.
“First, elevated economic uncertainty may lead to a larger-than-expected pullback in economic activity as businesses and households adopt a ‘wait-and-see’ approach before making spending decisions,” it said.
A re-escalation in tariff actions, including retaliatory tariffs, could lead to a full-blown global trade war, which will upend global supply chains, raise costs and cause a sharper global economic slowdown.
Also, disruptions to the global disinflation process and recession risks in both advanced and emerging markets could destabilise capital flows and trigger latent vulnerabilities in banking and financial systems.
Meanwhile, Singapore’s economy grew by 3.9 per cent on a year-on-year basis in the first quarter of 2025, moderating from the 5.0 per cent growth in the previous quarter. This growth was largely driven by the wholesale trade, manufacturing, finance, and insurance sectors.
In particular, growth in the manufacturing and wholesale trade sectors was likely to have been partly supported by front-loading activities ahead of anticipated US tariff hikes.
By contrast, the accommodation and the food and beverage services sectors contracted, with the former weighed down by the weak performance of the higher value-added hotel segments.
— Bernama
