UOB Global Economics and Markets Research has revised Singapore’s GDP growth forecast for 2025 to 1.7%, up from the previous 1.5%, driven by continued front-loading of exports amidst easing US-China trade tensions. The first quarter of 2025 saw GDP growth adjusted to 3.9% year-on-year, a slight increase from earlier estimates, with significant contributions from the construction and services sectors.
The report highlights that domestic-oriented services such as food and beverage, accommodation, and retail trade remain sluggish, partly due to a slow recovery in tourist arrivals, which reached 92% of 2019 levels in Q1 2025. However, transportation and storage services benefitted from export front-loading, with real non-oil re-exports (NORX) showing strong growth.
Despite the positive adjustments, UOB warns of potential headwinds. The Ministry of Trade and Industry (MTI) maintains a cautious outlook, citing risks such as possible re-escalation of tariffs and a slowdown in global trade, particularly in the latter half of 2025. The financial services sector is also expected to face challenges due to slower growth in banking and fund management.
Looking ahead, UOB anticipates that consumer-facing sectors may encounter difficulties due to a cooling domestic labour market and challenging tourist recovery. The bank has lowered its 2026 GDP growth forecast to 1.4%, reflecting concerns over a potential downturn in trade and manufacturing activities.
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