The report noted that Singapore’s economy grew by 4.4% year-on-year in the second quarter, slightly higher than the 4.1% growth in the first quarter. On a seasonally adjusted quarter-on-quarter basis, Singapore’s economy expanded by 1.4% in the second quarter, reversing a 0.5% contraction in the first quarter. This growth was primarily driven by export-oriented sectors such as wholesale trade, manufacturing, finance and insurance, and transportation and warehousing. These sectors benefited from advance trade activity within the region in preparation for impending US tariffs. However, the local food and beverage services sector contracted due to increased outbound travel by residents.
The report noted that in May, Singapore’s Ministry of Trade and Industry (MTI) had maintained its 2025 GDP growth forecast at “0.0% to 2.0%,” given the potential negative impact of the broad US tariffs announced in April on major economies. However, the 90-day suspension of US tariffs delayed the potential negative economic impact, and advance trade activity during this period provided a temporary boost to production and exports.
Nevertheless, the MTI warned in the report that economic growth in Singapore’s major trading partners is expected to slow in the second half of 2025, following the strong performance in the first half of the year. As the boost from early trade activity fades and US tariffs take effect, economic growth in the US, the eurozone, and China is projected to slow. Furthermore, the global economy remains subject to numerous uncertainties, including the unpredictability of US trade policy, potential shocks to global financial markets, and potential disruptions to energy supplies from geopolitical tensions.
For Singapore, economic growth is projected to slow in the second half of 2025, with export-oriented sectors in particular facing challenges from weakening demand. Manufacturing growth is expected to weaken as US tariffs impact global end-market demand. However, there are some bright spots in sectors such as aerospace and precision engineering, including continued growth in aviation repair, overhaul, and refurbishment work and increased capital investment by semiconductor manufacturers in AI-related areas.
The report notes that despite strong economic performance in the first half of 2025, the outlook for full-year economic growth remains challenging. The Ministry of Trade and Industry will continue to closely monitor global and domestic economic developments and adjust its growth forecasts as necessary.