Singapore is getting a boost in its economic outlook for 2025, with the Ministry of Trade and Industry (MTI) raising the growth forecast to around 4%. This significant revision, up from a previous estimate of 1.5% to 2.5%, follows a stronger-than-expected performance in the third quarter of 2024.
Performance Highlights
According to MTI’s latest press release, Singapore’s GDP grew by 4.2% year-on-year in the third quarter, outpacing earlier predictions. This growth was driven primarily by:
- Manufacturing sector
- Wholesale trade
- Finance and insurance
On a quarter-on-quarter basis, the economy expanded by 2.4% between July and September, improving from 1.7% in the previous quarter.
Global Conditions and Local Impact
The MTI noted that global economic conditions have proved to be more resilient than anticipated, supported by:
- Strong front-loading activities in the earlier part of the year
- De-escalation of trade tensions, particularly between the US and China
- Robust export growth from key partners like China and Vietnam
Interestingly, the boom in artificial intelligence (AI) has played a crucial role, not just in the US but also for Singapore, particularly regarding the export of AI-related semiconductors.
Looking Ahead: Forecast for 2026
Despite the positive news for 2025, MTI anticipates a slowdown in GDP growth for 2026, projecting a growth range of 1% to 3%. The ministry highlighted potential challenges, including:
- Gradual repercussions from US tariffs on Singapore’s exports
- Global economic uncertainties that could dampen demand for Singaporean products
Nevertheless, there are positive indicators, especially in the construction sector, which is set to benefit from increased public residential building projects and civil engineering works.
Monitoring Future Developments
Dr Beh Swan Gin, MTI’s permanent secretary, assured that the ministry will closely monitor both global and domestic economic developments, remaining agile in its forecasts as necessary. Reflecting on the current trajectory, it seems that Singapore is poised for a dynamic growth period—let’s just hope it stays on the right track!