Singapore's GDP growth forecast for 2025 stays at a cautious 0–2 per cent as trade tensions and slowing global demand weigh on the economy.
KEY POINTS
IN SIMPLE TERMS
Singapore's economy is expected to grow very slowly in 2025 compared to previous years, mainly because countries are arguing about trade and buying fewer goods. Even though some sectors like manufacturing and finance are still growing, others like restaurants and hotels are struggling.
WHY IT MATTERS
WHERE DO YOU STAND?
Do you think Singapore's economy will grow faster than the 0–2 per cent forecast, or will global headwinds push it toward the lower end?
👍 👎 Vote ↓New forecasts show Singapore’s economy facing a slower year ahead, with global trade tensions weighing on exports and growth momentum.
In a press release by MTI, the Ministry of Trade and Industry announced on 22 May 2025 that Singapore’s GDP growth forecast for 2025 will remain at 0.0 to 2.0 per cent.
This keeps the earlier guidance unchanged, as the risk of a weaker global economy continues.
As quoted in MTI, “Singapore’s GDP growth forecast for 2025 has been maintained at ‘0.0 to 2.0 per cent’.”
This conservative range is in response to ongoing trade tensions and softening global demand.
The Singapore economy grew by 3.9 per cent year-on-year in Q1 2025, slowing from 5.0 per cent in the last quarter of 2024.
Compared to Q4 2024, the economy shrank by 0.6 per cent on a seasonally adjusted basis.
Main growth drivers were wholesale trade, manufacturing, and finance & insurance services.
Front-loading of trade before the expected US tariff hike boosted some sectors.
However, the accommodation and food & beverage services sectors saw declines, as hotels faced weak demand in higher-end segments.
Transport, real estate, and professional services also saw gains.
The food & beverage services sector shrank by 0.2 per cent year-on-year, highlighting weakness in consumer spending.
Key sectors had mixed outcomes.
Electronics, precision engineering, and transport engineering were strong within manufacturing.
Construction was supported by both public and private projects.
Air passenger numbers kept the transportation & storage sector rising.
In retail, increased sales of motor vehicles offset drops in other areas.
| Sector | Q1 2025 YoY Change (%) | Q1 2025 QoQ Change (%) |
|---|---|---|
| Manufacturing | 4.0 | -5.8 |
| Wholesale Trade | 4.2 | -0.4 |
| Retail Trade | 0.1 | 1.8 |
| Construction | 5.5 | -1.4 |
| Transportation & Storage | 5.2 | 2.8 |
| Accommodation | -0.9 | -0.7 |
| Finance & Insurance | 4.5 | -1.1 |
Unemployment stayed steady at 2.1 per cent in Q1 2025, showing a stable jobs market.
Value added per worker grew 2.5 per cent.
According to MTI, the outlook for the global economy remains uncertain.
Earlier in April, the ministry had cut the forecast from 1.0–3.0 per cent down to 0.0–2.0 per cent.
US tariff hikes and tit-for-tat measures with China led to worries about global growth and international trade.
Recent talks have led to a temporary easing of tensions, with tariffs reduced for 90 days while further negotiations are held.
Risks include a possible return to higher tariffs, major economic slowdowns, and financial instability in both emerging and advanced markets.
The risks remain on the downside for 2025.
High uncertainty makes some firms and families nervous to spend.
If the US and China cannot reach a permanent deal, tariffs could rise again and disrupt supply chains.
Slow progress in tackling inflation and fears of recession worldwide can also shake financial markets and banks.
As quoted in MTI’s press release, “Against this backdrop, the growth of outward-oriented sectors in Singapore is expected to slow over the course of the year.”
According to MTI, manufacturing sector growth is at risk as the expected US tariff plans could reduce demand.
This includes electronics, a major export product for Singapore.
Trade-related services, like wholesale and transport, are also likely to feel pressure as world trade slows.
Consumer-facing sectors like retail trade and food & beverage remain weak, due to both overseas spending by residents and a softening labour market.
Business owners are less willing to spend on IT and marketing in this climate, impacting the information & communications sector.
Full-year real GDP growth was 4.4 per cent in 2024 and is projected at 0.0–2.0 per cent for 2025.
Singapore’s Q1 2025 services trade increased 3.8 per cent.
| Period | Total GDP | Manufacturing | Services |
|---|---|---|---|
| Q1 2024 | 3.2 | -1.1 | 4.5 |
| Q4 2024 | 5.0 | 7.4 | 4.6 |
| Q1 2025 | 3.9 | 4.0 | 3.6 |
Singapore’s economy is resilient, but the path ahead will depend on how global trade disputes and demand play out in coming months.
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