Singapore raises 2025 GDP growth forecast to 1.5–2.5%

Growth expected to slow in H2 as US tariffs take effect and front-loading fades.

The Ministry of Trade and Industry (MTI) has raised Singapore’s GDP growth forecast for 2025 from 0.0–2.0% to 1.5–2.5%, following stronger-than-expected economic performance in the first half of the year.

The economy grew 4.4% year-on-year in the second quarter of 2025, up from 4.1% in Q1, driven mainly by wholesale trade, manufacturing, finance & insurance, and transportation sectors.

However, sectors like food & beverage services declined due to more outbound travel.

MTI had earlier maintained a conservative GDP forecast in May, citing potential impacts from sweeping US tariffs announced in April.

However, subsequent developments including a 90-day US tariff pause and trade agreements with key partners like the Eurozone, Japan, South Korea, and Southeast Asian nations have softened expected economic headwinds. The ongoing US-China trade talks and potential tariff truce extension have further eased uncertainties.

Despite these positive developments, growth for Singapore’s key trading partners, including the US, Eurozone, and China, is expected to moderate in the second half of 2025.

The temporary boost from front-loading activities will dissipate, and US reciprocal tariffs are likely to take effect, slowing demand.

Singapore’s economic growth is anticipated to slow in the latter half of 2025, particularly in export-oriented sectors.

Manufacturing growth is expected to weaken as US tariffs impact global demand, though sectors such as transport engineering and precision engineering—driven by AI semiconductor investments—remain bright spots.

Wholesale trade and transportation & storage sectors are also likely to decelerate with waning front-loading benefits and softer global trade.

Additionally, the finance & insurance sector may face headwinds from weaker credit demand and lower payment transactions but could see support from buoyant market trading.

Consumer-facing sectors like retail and food & beverage services are also expected to remain subdued due to continued local spending abroad and softer domestic labor market conditions.

Global uncertainties remain high, including potential new tariffs, financial market shocks, and geopolitical tensions that could disrupt trade and energy supplies. Domestically, export-focused sectors and consumer spending face headwinds.

The ministry said it will continue to monitor developments and adjust forecasts if needed.