Singapore’s economic growth outlook for 2025 has been upgraded by the Ministry of Trade and Industry (MTI), following stronger-than-expected performance in the first half of the year. The revised GDP growth forecast now stands at between 1.5 percent and 2.5 percent, compared to the earlier projection of zero to 2 percent.
Stronger-Than-Expected First Half Performance
MTI’s latest data shows the Singapore economy grew by 4.4 percent year-on-year in the April to June period, slightly higher than the advance estimate of 4.3 percent. In the first quarter, GDP growth was recorded at 4.1 percent.
For the first half of 2025, Singapore’s economy expanded by 4.3 percent compared to the same period last year. MTI noted that the revised forecast reflects both the robust first-half performance and the anticipated slowdown in the second half of the year.
Impact of Global Tariff Developments
This is the second revision to the forecast this year. Initially, GDP growth was expected at between 1 percent and 3 percent, but the outlook was lowered in April after the United States announced broad-based tariffs, including a global baseline tariff of 10 percent.
However, a 90-day pause in reciprocal tariffs, along with trade agreements between the US and major partners such as the Eurozone, Japan, South Korea, and several Southeast Asian economies, has helped stabilise global trade sentiment. The tariff truce between the US and China has also been extended by another 90 days.
These developments provided a temporary boost to production and exports as companies accelerated orders ahead of potential tariff implementations.
Outlook for the Rest of the Year
Despite the positive start, MTI cautioned that Singapore’s economic outlook remains clouded by uncertainty. The ministry highlighted that risks are tilted to the downside due to several factors, including potential tariff escalations, tightening global financial conditions, and geopolitical tensions that could disrupt energy supplies.
Sectors sensitive to global demand, such as manufacturing, wholesale trade, and transportation, are expected to face headwinds in the second half of the year. Consumer-facing sectors may also remain subdued due to weaker domestic labour market conditions and increased overseas spending by residents.
Sector-by-Sector Second Quarter Performance
Growth in the second quarter was driven by wholesale trade, manufacturing, finance and insurance, and transportation and storage.
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Wholesale Trade: Expanded 4.7 percent year-on-year, boosted by higher sales of electronic components, telecommunications equipment, and petroleum products.
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Manufacturing: Grew 5.2 percent, with most clusters seeing gains except for chemicals and general manufacturing.
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Finance and Insurance: Benefited from increased demand for financial intermediation and insurance services.
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Transportation and Storage: Supported by higher port and air cargo activity.
The food and beverage services sector, however, contracted by 0.5 percent as outbound travel by locals continued to dampen domestic dining demand.
Non-Oil Domestic Exports See Significant Rise
Enterprise Singapore reported that non-oil domestic exports (NODX) grew by 7.1 percent in the second quarter, up from 3.3 percent in the first quarter.
Electronics exports surged 10.5 percent, led by personal computers, semiconductors, and disk media products. Non-electronic exports rose 6 percent, driven by higher shipments of non-monetary gold, specialised machinery, and marine structures.
The full-year NODX growth forecast remains at between 1 percent and 3 percent, with expectations of a weaker second-half performance as frontloading tapers and tariffs take effect.
Key Risks Ahead
MTI outlined three major risks to the growth outlook:
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A possible re-escalation of tariffs, increasing uncertainty and curbing spending and hiring.
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Sharper-than-expected tightening of global financial conditions, potentially triggering instability in banking and financial systems.
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Geopolitical tensions that could disrupt energy supply chains and raise global energy prices.
Conclusion
While Singapore’s economy has delivered an impressive first-half performance in 2025, the road ahead remains uncertain. Businesses and policymakers will need to navigate evolving global trade conditions, shifting tariff policies, and potential geopolitical disruptions.
The upgraded GDP forecast is a sign of resilience, but the second half of the year is expected to be more challenging.
