The government has raised its full year 2025 GDP growth range projection to between 1.5% and 2.5%, to take into account better-than-expected first half performance, where the impact of the trade war started by the US was not as bad as expected.
"However, the economic outlook for the rest of the year remains clouded by uncertainty, with the risks tilted to the downside," warns the Ministry of Trade and Industry (MTI) on Aug 12.
MTI's earlier forecast was for a range from 0% to 2%.
In the most recent 2Q2025, Singapore's GDP was up 4.4% y-o-y, extending the 4.1% growth in the previous quarter.
On a q-o-q seasonally-adjusted basis, the Singapore economy expanded by 1.4%, a reversal from the 0.5% contraction in the first quarter.
This brings Singapore's GDP growth for 1H2025 to 4.3% y-o-y, with gains driven mainly wholesale trade, manufacturing, finance & insurance, and transportation & storage sectors.
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MTI observes that the performance of most advanced and regional economies has been more resilient than expected as the US’s 90-day pause on its reciprocal tariffs postponed the potential negative economic impact, while front-loading activities during the tariff pause provided a temporary boost to production and exports.
"There has also been a de-escalation in trade tensions, with the US striking trade deals with several trading partners, including the Eurozone, Japan, South Korea and several Southeast Asian economies, that led to a lowering of their reciprocal tariffs compared to that announced earlier," says MTI.
Meanwhile, the US and China continue to be engaged in trade talks, with indications that the 90-day tariff truce between the two countries could be extended.
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As such, 2025 GDP growth of the key economies, including the US, Eurozone and China, is not expected to be as weak as earlier projected. Accordingly, MTI has updated its assessment of the overall external outlook for Singapore.
However, MTI warns that the growth of Singapore’s major trading partners in the second half of the year is expected to moderate from that in the first half, as the boost from front-loading activities dissipates and the US’ reciprocal tariffs take effect.
"Overall, the balance of risks in the global economy is skewed to the downside," says MTI.
"Against this backdrop, Singapore’s economic growth is expected to slow in the second half of the year compared to the first half because of slower growth in outward-oriented sectors," says MTI.
