Singapore Raises 2025 Growth Forecast but Highlights Global Risks

Singapore’s Ministry of Trade and Industry raised its economic growth forecast for 2025 on Tuesday, citing a stronger-than-expected performance in the first half of the year. However, officials cautioned that the outlook remains clouded by global uncertainties, especially due to US tariff policies.

Revised Growth Outlook

• The city-state’s gross domestic product (GDP) growth forecast has been increased to 1.5–2.5 percent, up from the previous estimate of 0–2.0 percent.
• This revision reflects Singapore’s robust economic expansion, which saw growth of 4.4 percent year-on-year in the second quarter, following 4.1 percent growth in each of the preceding three quarters.

Concerns Over US Tariffs and Global Fragility

Singapore, Southeast Asia’s second-largest economy, is heavily dependent on international trade. This makes it vulnerable to any global slowdown induced by tariffs, including the baseline 10 percent levy imposed by US President Donald Trump.

The ministry warned that the economic outlook for the remainder of 2025 remains uncertain, with risks skewed towards the downside. Key concerns include:

• The unpredictability of US trade policies, particularly concerning the timing and scale of tariffs on pharmaceutical products and semiconductors—both significant Singaporean exports.
• Last week, President Trump announced a 100 percent tariff on semiconductor chips from companies that do not invest in the United States and threatened levies of up to 250 percent on pharmaceutical imports.

Sectoral Impact and Future Projections

• Singapore’s economic growth is expected to slow in the second half of 2025 compared with the first.
• The manufacturing sector is projected to weaken due to the impact of US tariffs on demand in global markets.
• The wholesale trade sector is anticipated to cool as front-loading activities subside and global trade softens.
• The transportation and storage sectors could face challenges from reduced demand for shipping and air cargo services.

Government Response and Monitoring

The trade ministry emphasised its commitment to closely monitoring developments in both the global and domestic economies and stated it would adjust forecasts if necessary throughout the year.

Summary Table: Singapore’s 2025 Economic Outlook