S'pore growth forecast stays at 0% to 2%, but outlook 'improves slightly'

QI growth of 3.9% beats estimates, but risks remain as global uncertainty persists: MTI

- Angela Tan

The Government is keeping Singapore's economic growth forecast for 2025 at zero per cent to 2 per cent, though it said the external demand outlook for the rest of the year has "improved slightly", given the tariff truces that have de-escalated global trade tensions.

"Notwithstanding these positive developments, the global economic outlook remains clouded by significant uncertainty, with the risks tilted to the downside," said Dr Beh Swan Gin, permanent secretary at the Ministry of Trade and Industry (MTI), following the release of the latest quarterly economic survey report on May 22.

Singapore's economy grew 3.9 per cent year on year in the first quarter of 2025 — a tad higher than an earlier estimate of 3.8 per cent made in April, but weaker than the 5 per cent growth in the fourth quarter of 2024.

On a quarter-on-quarter seasonally adjusted basis, the economy contracted by 0.6 per cent. This was a reversal from the 0.5 per cent expansion in the fourth quarter of 2024.

First-quarter 2025 growth was mainly driven by the wholesale trade, manufacturing, and finance and insurance sectors, partly supported by front-loading activities ahead of anticipated tariff hikes by the US.

In contrast, the accommodation, and food and beverage services sectors contracted.

MTI said it has kept to its April forecast after taking into account the economy's performance in the first quarter and the de-escalation in global trade tensions, in particular, between the US and China.

In April, MTI cut its gross domestic product (GDP) growth forecast for 2025 from 1 per cent to 3 per cent following sweeping tariffs announced by the US and the ensuing cycle of tit-for-tat tariffs between the US and China.