Economists have cut growth forecasts for Singapore’s gross domestic product and consumer prices as uncertainties of the global trade war leave the Lion City vulnerable to risks.
Singapore’s economy is expected to expand only 0.2% year-on-year in the third quarter this year, according to the median prediction of 13 economists in a Bloomberg survey conducted this month. That’s a sharp cut from the 1.3% predicted growth in an earlier survey conducted in March.
GDP growth for this year is now expected to be just 1.7%, compared with the earlier forecast of 2.6%.
“Singapore’s external-oriented economy faces heightened uncertainties and downside risks from the tariff chaos,” said Han Teng Chua, a senior economist at DBS Bank. While the city-state’s trade-related sectors are likely to be temporarily supported, he foresees softer real GDP growth in the second half of this year because of high trade frictions and weaker business sentiment.
The Ministry of Trade and Industry has maintained a recently downgraded forecast for 2025 GDP growth at 0%-2% as US tariffs clouded global trade outlook. Prime Minister Lawrence Wong earlier warned that a recession can’t be ruled out.
“The recent de-escalation in US-China tariffs has likely offered some temporary relief,” said Lloyd Chan, a strategist at MUFG Bank. “However, given Singapore’s heavy reliance on exports, its economy remains vulnerable to the broader impact of elevated US tariffs, particularly through negative spillovers from tariffs imposed on China. The risk of recession is high.”
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Economists now see Singapore’s headline inflation for this year at 1.1%, compared to the earlier forecast of 1.6%. They’ve also cut the forecast of core inflation to 0.9% from 1.3%.
“We expect headline consumer prices to ease further in the second half due to slower global demand and declining global oil prices,” said Afham Zulghafir, an economist at CGS International.
