Debate on ministries' budgets: Trade and Industry S'pore's growth to slow as global trade tensions rise: DPM Gan

But there are emerging opportunities in the region's digital and green economy, he says

- Ovais Subhani

Intensifying trade frictions and competition for strategic investments among major economies will weigh on the pace of Singapore's economic growth in 2025, Deputy Prime Minister and Minister for Trade and Industry Gan Kim Yong said.

Hence, the economy will expand by 1 per cent to 3 per cent, slower than the 4.4 per cent pace in 2024. Inflation, however, is likely to stay moderate, with core inflation — which excludes private transport and accommodation costs — at 1 per cent to 2 per cent in 2025, DPM Gan said on March 6 in the debate over the Trade and Industry Ministry's 2025 budget.

Nevertheless, Asia's economy will continue to grow, and South-east Asia is expected to become the fourth-largest economy in the world by 2030, he added.

Artificial intelligence, digitalisation and the low-carbon transition will also present new opportunities in the region's digital and green economy.

Meanwhile, as the trade war between the US and its major trading partners intensifies, global trade flows will reconfigure.

"Singapore can capitalise on the shifts in production and supply chains to attract new investments and strengthen its position as a key node in the reconfigured trade flows," DPM Gan said.

The minister said the Republic will enhance its focus on the economy's long-term growth potential through a four-plank strategy of strengthening its connectivity to the region and the world; growing strong enterprises through innovation; fostering a pro-enterprise environment; and investing in its people.

Part of this strategy is to strengthen Singapore's ecosystem of innovation-driven businesses at home by doubling down on its research and development (R&D) initiatives.

To remain a semiconductor powerhouse, Singapore must invest in R&D to drive innovation across the industry, DPM Gan said.