Singapore’s economy demonstrated resilience in Q2 2025, achieving a 4.4% year-on-year growth, slightly above the advance estimate of 4.3% and improving on Q1’s 4.1% growth. The quarter-on-quarter growth was 1.4%, reversing a 0.5% decline from the previous quarter. This performance led the Ministry of Trade and Industry to adjust its full-year growth forecast to between 1.5% and 2.5%, up from the previous range of 0% to 2%.
The growth was largely driven by stronger-than-expected outputs in manufacturing, wholesale trade, and construction. Manufacturing saw a 5.2% year-on-year increase, with most clusters expanding except for chemicals and general manufacturing. Wholesale trade rose by 4.7%, propelled by machinery, equipment, and supplies, whilst construction climbed 6%, supported by both public and private projects. However, food and beverage services contracted by 0.5%, and retail growth remained subdued.
Zavier Wong, Market Analyst at eToro, noted that much of Q2’s strength came from exporters front-loading orders ahead of the 1 August US tariff deadline, providing a one-off boost unlikely to continue into the second half. “In H2, manufacturing could slow sharply, especially in electronics and transport-related goods,” Wong stated. The potential 100% US semiconductor tariff poses a direct threat to precision engineering and logistics.
Whilst construction and precision engineering tied to non-US markets may continue to support growth, global demand softening could challenge Singapore’s economic momentum. If growth falters, the Monetary Authority of Singapore might need to adjust its exchange rate stance before the year ends. The second half of the year will reveal whether Singapore’s economic strength is sustainable or merely a temporary boost from trade flows.
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