Singapore has revised its gross domestic product (GDP) growth forecast for 2025, lowering it from 1 to 3 per cent to a more cautious range of 0 to 2 per cent.
The announcement was made on 14 April 2025 by the Ministry of Trade and Industry (MTI), which cited escalating global trade tensions as the primary cause.
In particular, the MTI highlighted the sweeping tariff measures introduced by United States President Donald Trump.
These include a baseline tariff of 10 per cent on all imports and higher levies aimed at countries with significant trade surpluses with the US.
The ministry warned that these actions would have far-reaching consequences on global trade and economic growth.
According to MTI, the tariffs—introduced on 2 April—are already affecting business and consumer sentiments.
This, in turn, has begun to impact domestic consumption and investment in many economies, including Singapore.
The trade war between the US and China has also intensified, with tit-for-tat tariffs continuing despite a temporary 90-day pause in some tariff hikes for US trading partners.
However, Singapore, which maintains zero tariffs on US imports, remains subject to the blanket 10 per cent tariff.
Singapore’s GDP grew by 3.8% in the 1Q 2025
Advance estimates from MTI show that Singapore’s economy grew by 3.8 per cent year-on-year in the first quarter of 2025.
However, on a quarter-on-quarter seasonally adjusted basis, the economy contracted by 0.8 per cent, a reversal from the previous quarter’s 0.5 per cent expansion.
The manufacturing sector recorded a year-on-year growth of 5.0 per cent but shrank by 4.9 per cent compared to the previous quarter.
The finance and insurance sector, while posting annual growth, also saw a steep quarter-on-quarter decline of 5.0 per cent.
MTI has expressed concern that the outlook for Singapore’s outward-oriented sectors will continue to deteriorate as global demand softens.
Trade-reliant sectors face headwinds
Key industries such as manufacturing, wholesale trade, and transportation and storage are particularly vulnerable due to their reliance on global trade flows.
Finance and insurance are expected to face further challenges due to weakened trading activity and reduced consumer spending.
The uncertain economic climate may also reduce firms’ investment activities and dampen credit intermediation efforts.
Prime Minister Lawrence Wong acknowledged on 8 April that Singapore’s economy would be significantly affected, although it may or may not slip into recession.
He warned of slower job creation, smaller wage increases, and the potential for higher retrenchments if firms relocate operations back to the US.
Wong further noted that the situation illustrates a fundamental shift in the global trade environment.
“The era of rules-based globalisation and free trade is over,” he said.
In response, the government will establish a national task force to support businesses and workers through the economic transition.
This task force, to be chaired by Deputy Prime Minister and Minister for Trade and Industry Gan Kim Yong, will include stakeholders from economic agencies, business federations, and trade unions.
MTI will continue to monitor the situation and will revise forecasts as necessary, with more detailed data to be released in the Economic Survey of Singapore in May 2025.
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