SINGAPORE: Singapore’s Ministry of Trade and Industry (MTI) on Tuesday revised its 2025 economic growth forecast upward to 1.5%–2.5% from the earlier 0%–2% range, citing stronger-than-expected performance in the first half of the year.
The upgrade follows GDP growth of 4.4% year-on-year in Q2 2025, after 4.1% in Q1, taking first-half growth to 4.3%. On a quarterly seasonally adjusted basis, the economy expanded 1.4% in Q2, rebounding from a 0.5% contraction in Q1.
MTI attributed the strong start to robust export-oriented sectors — wholesale trade, manufacturing, finance, insurance, and transport — boosted by “front-loading” of shipments ahead of US tariff measures. Exports rose 5.2% in H1, well above forecasts.
However, MTI warned of headwinds in the second half as the boost from front-loading fades and US reciprocal tariffs take effect. Risks include:
- Slower growth among key trading partners
- Uncertainty over US trade policies, including tariffs on pharmaceuticals and semiconductors
- Potential financial market shocks
- Geopolitical tensions affecting energy supply and prices
Domestic sectors such as food and beverage services shrank in H1, partly due to increased outbound travel.
Bright spots remain in transport engineering, driven by high-value aircraft maintenance and overhaul works, and in precision engineering, supported by semiconductor investments tied to artificial intelligence.
