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SINGAPORE’s Ministry of Trade and Industry (MTI) has maintained the country’s gross domestic product (GDP) growth forecast for 2025 at between 0.0 and 2.0 per cent, citing mixed signals from recent global developments and domestic economic performance in the first quarter.
While the outlook for external demand has improved slightly since April, following de-escalation efforts by major economies, MTI warned that outward-oriented sectors are likely to face headwinds amid persistent global economic uncertainty.
“In particular, the United States’s (US) tariff measures are likely to adversely affect the manufacturing sector given its export exposure to the US market, as well as slowing growth in global end-markets,” the ministry stated in its First Quarter 2025 Economic Survey, released today.
The revised forecast range was first issued in April, downgraded from the earlier projection of 1.0 to 3.0 per cent, in response to sweeping US tariff announcements and retaliatory actions by China.
“Notwithstanding the positive developments in recent weeks, the global economic outlook remains clouded by significant uncertainty, with the risks tilted to the downside,” MTI said.
The ministry highlighted several potential risks, including a possible pullback in economic activity as businesses and households adopt a cautious stance amid elevated uncertainty.
“A re-escalation in tariff actions, including retaliatory tariffs, could lead to a full-blown global trade war, which will upend global supply chains, raise costs and cause a sharper global economic slowdown,” it warned.
It also flagged the dangers of disrupted disinflation trends and recession risks in both developed and emerging markets, noting that such instability could spark destabilising capital flows and expose vulnerabilities within financial systems.
Singapore’s economy expanded by 3.9 per cent year-on-year in the first quarter of 2025, easing from 5.0 per cent in the final quarter of 2024. The growth was supported mainly by the wholesale trade, manufacturing, and finance and insurance sectors.
MTI noted that some of this growth may have been driven by “front-loading activities ahead of anticipated US tariff hikes.”
In contrast, sectors such as accommodation and food and beverage services contracted during the same period, with the accommodation sector dragged down by weaker performance in higher value-added hotel segments. - May 22, 2025