Singapore Downgrades 2025 Growth Forecast to 0%-2% Amid US-China Tariff War

The Ministry of Trade and Industry (MTI) has cut Singapore's growth forecast for 2025 to zero per cent to 2 per cent in the face of a US-China tariff war, with some economists warning of a possible technical recession in 2025.

- Angela Tan

MTI's new forecast announced on April 14 is a downgrade from the 1 per cent to 3 per cent range previously. Singapore's economy grew 4.4 per cent in 2024.

On the same day, the Monetary Authority of Singapore further reduced the pace of the local currency's trade-weighted appreciation, in response to easing inflation and rising risks to economic growth.

MTI also said Singapore's economy grew 3.8 per cent year on year in the first quarter of 2025, in advance estimates. This is slower than the 5 per cent growth in the fourth quarter of 2024 and some market projections.

On a quarter-on-quarter seasonally adjusted basis, the economy contracted 0.8 per cent, a reversal from the 0.5 per cent expansion in the fourth quarter of 2024.

Analysts polled by Bloomberg expected 4.5 per cent year-on-year growth and a 0.4 per cent quarter-on-quarter contraction.

MTI said it will continue to closely monitor global and domestic developments, and make further adjustments to its new forecast if necessary.

In a ministerial statement on US tariffs on April 8, Prime Minister and Minister for Finance Lawrence Wong said Singapore may or may not go into recession in 2025, but its growth will be significantly impacted.

On April 9, US President Donald Trump announced a 90-day pause on reciprocal tariffs, with the exception of those on China, which are currently a staggering 145 per cent. In retaliation, China raised its tariffs on American goods to 125 per cent—effective from April 12.

Singapore is still subject to the flat duty of 10 per cent that Mr Trump placed on goods arriving from all foreign countries, which took effect on April 5.