S'pore 2025 GDP forecast adjusted downwards to 0%-2% from 1%-3%

Singapore’s growth forecast for 2025 has been cut to a range of 0 per cent to 2 per cent — down from 1 per cent to 3 per cent — due to concerns about the U.S.-China tariff war resulting in a global economic slowdown.

The Ministry of Trade and Industry (MTI) issued its latest projection on Apr. 14.

Singapore’s economy grew 3.8 per cent year on year in the first quarter of 2025, in advance estimates, the ministry said.

This is weaker than the projected 5 per cent growth in the fourth quarter of 2024.

On a quarter-on-quarter seasonally-adjusted basis, the economy contracted 0.8 per cent.

Declines in manufacturing and some outward-oriented services sectors, such as finance and insurance as a result of weaker demand, contributed to this reversal from the 0.5 per cent expansion in the fourth quarter of 2024.

MTI's assessment

“MTI’s assessment is that the external demand outlook for Singapore for the rest of the year has weakened significantly," the ministry said.

"This has led to a deterioration in the outlook of outward-oriented sectors in Singapore. In particular, the manufacturing sector is likely to be negatively affected by weaker global demand," it added

A chain effect could result.

MTI said the manufacturing sector is likely to be negatively affected by weaker global demand.

This, alongside softening global trade, will also weigh on the growth of the wholesale trade sector.

The pullback in global trade will similarly dampen the growth of the transportation & storage sector through its drag on demand for shipping and air cargo services.

At the same time, the finance and insurance sector could see weaker trading activity due to risk-off sentiments that will adversely affect the net fees and commission incomes of the banking, fund management, forex and security dealing segments, MTI added.

In addition, the uncertain economic backdrop will likely dampen firms’ capital investment spending and constrain credit intermediation activity.

Furthermore, the growth of payments firms could moderate in tandem with tepid business activity and lower consumer spending.

"Given the significant downside risks, MTI will continue to closely monitor global and domestic developments, and make further adjustments to the forecast if necessary," the ministry said.

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