Singapore GDP forecast lowered on tariff impact; MAS easing likely

There is a 90% chance MAS will enact a 1% slope reduction to zero, Nomura said.

Singapore’s GDP growth forecast for 2025 has been lowered to 2.3% from 2.8%, Nomura’s Global Research Team said in a report.

Separately, brokerage firm CGS International anticipates growth outlook to fall at the lower end of the official “1% to 3%” range forecast, with the firm estimating a 2.5% growth for 2025.

The revised estimates come on the back of the reciprocal tariffs announced by US President Donald Trump in early April.

Although Singapore faces a lower tariff of 10% than its peers and for now avoids the tariffs on important sectors— semiconductors and pharmaceuticals— the indirect effects from higher global trade friction and the associated decline in external demand will weigh significantly on exports, Nomura said.

Already, Q1 GDP growth is tracking lower due to a sharp drop in industrial output in February 2025.

Meanwhile, the Monetary Authority of Singapore (MAS) is now 90% likely to ease its policy. Nomura’s base case now is for a 1% slope reduction to zero.

However, the government should have ample firepower to provide additional fiscal support measures in 2025.

Our FX strategy team now assigns an increased likelihood of 90% (was 70%) to the MAS easing policy, with our base case now for a 1.0% slope reduction to zero.

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