S'pore 2025 GDP growth forecast bumped to 4%, all sectors grew in Q3 2025 except F&B

Singapore's Gross Domestic Product (GDP) is expected to grow by around four per cent in 2025, higher than the previous forecast of 1.5 per cent to 2.5 per cent.

This comes after stronger-than-expected performance in the third quarter of the year (Q3 2025) , driven by growth in the manufacturing, wholesale trade and finance and insurance sectors.

Meanwhile, GDP growth forecast for 2026 stands at one to three per cent.

The updated forecast was announced by the Ministry of Trade and Industry (MTI) on Nov. 21.

4.2 per cent growth in Q3 2025

In a press release on Singapore's third quarter economic survey, MTI shared that Singapore's economy expanded by 4.2 per cent on a year-on-year basis in Q3 2025.

On a quarter-on-quarter, seasonally-adjusted basis, Q3 growth was 2.4 per cent, faster than the 1.7 per cent experienced in the second quarter of this year.

For the first three quarters of 2025, Singapore's GDP growth averaged 4.3 per cent year-on-year.

The Q3 2025 GDP performance was mainly driven by the manufacturing, wholesale trade and finance and insurance sectors.

Within the manufacturing sector, the electronics cluster expanded by 6.1 per cent on account of a significant increase in the demand for AI-related semiconductors, servers, and server-related products.

The biomedical manufacturing sector expanded by 8.9 per cent, supported by higher-than-expected levels of production on key high-value pharmaceutical ingredients.

Growth in the finance and insurance sector was supported by banks’ net fees and commissions as business and investor sentiments improved.

Global economy was more resilient than expected

While global growth was expected to slow down in the second half of the year, economic conditions turned out to be more resilient, MTI explained.

GDP growth in most of Singapore's key trading partners came in better than expected in Q3.

In regional economies such as China and Vietnam, export growths remained robust amidst ongoing trade diversion and supply chain adjustments.

The AI boom has further buoyed the global economic environment, providing support for U.S. economic growth and for the exports of AI-related semiconductors from the region.

MTI noted that the rollout of sectoral tariffs on semiconductors and pharmaceuticals has been slower than anticipated.

Demand for AI-related electronics should continue to support Singapore's manufacturing and wholesale trade sectors for the rest of the year, the ministry said.

F&B only sector that contracted

Growth was experienced across most sectors on a year-on-year basis, except the food and beverage services industry, which shrank by 1.2 per cent year-on-year.

This was up from the 0.5 per cent contraction in the previous quarter.

MTI explained that the weak performance came on the backs of a fall in sales volumes at restaurants, fast-food outlets and cafes, food courts and other eating places.

This outweighed an increase in the sales volume of food caterers.

On a quarter-on-quarter, seasonally-adjusted basis, the sector shrank 0.1 per cent, extending the 0.7 per cent contraction in Q2 2025.

Slowdown expected in 2026

GDP growth for Singapore's key trading partners is expected to be lower in 2026 than 2025 as the impact of U.S. tariffs is expected to be more pronounced.

Slowdown in major economies such as China and the European Union will moderate demand for Southeast Asia exports.

MTI further noted two downside risks in the global economy that will persist in 2026.

Firstly, global uncertainty remains elevated and renewed escalation in tariff actions or geopolitical tensions could lead to a resurgence in economic uncertainty.

Secondly, a decrease in risk appetite could trigger corrections in financial markets that will spill over to broader economic growth.

Singapore's manufacturing and trade-related services sectors are projected to expand at a slower pace, while the finance and insurance sector is expected to register steady growth.

Growth in consumer-facing sectors such as retail trade and food and beverage services is likely to remain subdued, MTI said.

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