0-2% GDP Growth Forecast: Singapore Braces for 2025 Slowdown

1. Singapore’s GDP growth forecast for 2025 stays at 0.0 to 2.0 per cent.
2. Economic growth slowed to 3.9 per cent in Q1 2025 from 5.0 per cent in Q4 2024.
3. Manufacturing, wholesale trade, and finance supported growth, but trade tensions present risks.

New forecasts show Singapore’s economy facing a slower year ahead, with global trade tensions weighing on exports and growth momentum.

Announcement of GDP Growth Forecast

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.

Singapore’s Economic Performance in Q1 2025

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.

• Manufacturing grew by 4.0 per cent year-on-year, but fell 5.8 per cent from the previous quarter.
• Wholesale trade rose 4.2 per cent but dropped 0.4 per cent quarter-on-quarter.
• Construction increased 5.5 per cent year-on-year but declined 1.4 per cent quarter-on-quarter.
• Retail trade grew only 0.1 per cent year-on-year.

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.

Sectoral Details and Growth Table

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.

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.

Economic Outlook for 2025: Global Context

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.

• The US and China agreed to reduce tariffs, bringing some relief to exporters.
• US tariffs on China fell from 145 per cent to 30 per cent, China’s on the US from 125 per cent to 10 per cent, both for 90 days.
• Growth in US and China may be a bit better than first expected because of this truce, but is still likely to slow.
• Eurozone growth outlook remains weak.
• Key Southeast Asian markets will rely on domestic demand, but their exports may be affected by slower global trade.

Risks include a possible return to higher tariffs, major economic slowdowns, and financial instability in both emerging and advanced markets.

Risks to the Global Economic Outlook

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.

• Trade war could break out again if talks stall.
• Cost of goods may increase, raising stress for businesses and consumers.
• Capital flows could swing, exposing weak spots in the financial system.

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.”

Sector Outlook for the Rest of 2025

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.

• The earlier jump from “front-loading” ahead of tariffs will fade.
• Wholesale trade sales volumes may dip later in the year.
• Shipping and air cargo will be affected by slower trade flows.
• Finance & insurance may face weaker trading and payments activity.

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.

Key Economic Indicators

• Consumer Price Index grew by 1.0 per cent in Q1 2025.
• Total merchandise trade rose by 4.9 per cent year-on-year.
• Non-oil domestic exports increased by 3.3 per cent, while oil domestic exports dropped 9.2 per cent.
• Retail sales index increased by 0.3 per cent year-on-year.
• Employment rose by 6,900 in Q1 2025.

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.

Summary Table: Year-on-Year GDP Growth Rates (%)

Singapore’s economy is resilient, but the path ahead will depend on how global trade disputes and demand play out in coming months.

Do you agree with Singapore’s cautious economic outlook for 2025, or do you expect a stronger rebound? Click Agree or Disagree below.