Economists flag risks, but do not see S'pore entering recession

The economists now expect growth to fall to 0.9 per cent in the third quarter of 2025.

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DBS economist Chua Han Teng said: "This marks a notable deceleration from the strong 4-plus per cent expansion recorded in both the first half of 2025 and 2024."

But he said the construction sector remains a bright spot, as it benefits from multi-year projects to enhance Singapore's competitiveness in trade, transport and tourism, as well as public housing building activities.

Economists' median forecast for overall inflation in 2025 is 0.9 per cent, unchanged from the June survey. The forecast for core inflation is 0.7 per cent, slightly lower than 0.8 per cent in the previous survey.

As for the labour market, economists expect the unemployment rate to be 2.2 per cent at the year end, unchanged from the June survey.

Mr Euben Paracuelles, Nomura's chief Asean economist, does not see Singapore slipping into a recession even after factoring in a slowdown in the second half of 2025 due to tariff-related impact.