Steady growth seen in 2025 driven by manufacturing

RHB has kept its GDP growth forecast at 3.0%, whilst UOB expects growth to come in slightly lower at 2.5%.

Singapore’s economy is projected to grow steadily in 2025, with economists from RHB and UOB maintaining optimistic yet cautious forecasts.

RHB has kept its GDP growth forecast at 3%, which is at the upper end of the official projection range of 1%–3%.

UOB, meanwhile, expects growth to come in slightly lower at 2.5%, citing potential downside risks stemming from external factors.

RHB highlighted Singapore's resilience in the manufacturing sector as it rebounded with a 4.3% YoY growth in 2024, after contracting by 4.2% in 2023.

UOB also observed robust growth in manufacturing, which posted a 7.4% YoY increase in the fourth quarter of 2024, fuelled by demand for semiconductor chips in the PC, smartphone, and data center markets.

The wholesale trade sector followed suit, growing by 6.7% YoY during the same period. However, consumer-facing sectors like retail trade and food & beverage remained sluggish, as locals shifted their spending overseas despite a gradual recovery in tourist arrivals.

RHB forecasts that the Monetary Authority of Singapore (MAS) will keep its policy parameters unchanged, with core inflation stabilising at 1.8% and headline inflation at 2.3%.

The strong domestic wage growth and local employment rates are expected to cushion the impact of global trade uncertainties.

On the fiscal front, RHB anticipates that the upcoming Budget 2025 will adopt an expansionary stance, with a projected deficit of 0.8% of GDP.

Looking ahead, both banks see the electronics, finance & insurance, and transport engineering sectors as key growth pillars for 2025.

The global electronics cycle remains a significant tailwind, whilst Singapore's strategic role in the semiconductor supply chain positions it well for continued growth.

However, the pace of growth may moderate in the latter half of the year, especially if geopolitical tensions escalate or global monetary conditions tighten unexpectedly.

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