Singapore’s economy showed resilience in the second quarter of 2025, with GDP growth revised to 4.4% year-on-year, according to UOB Global Economics and Markets Research. This adjustment is a slight increase from the advance estimate of 4.3%. The revision comes amid a mixed performance across sectors, with manufacturing seeing a downward revision to 5.2% year-on-year, whilst construction and services experienced upward adjustments.
The Ministry of Trade and Industry (MTI) has upgraded the GDP growth forecast for 2025 to a range of 1.5% to 2.5%, up from the previous 0.0% to 2.0%. However, the economic outlook remains uncertain, with risks leaning towards the downside. Trade-related services were notably strong, driven by export front-loading ahead of tariff deadlines, with wholesale trade rebounding by 2.8% quarter-on-quarter.
Despite the positive GDP figures, consumer-facing sectors such as retail trade and food and beverage services faced challenges, partly due to a slow recovery in tourist arrivals, which remained below pre-pandemic levels. Additionally, outbound travel by Singapore residents has surpassed 2019 levels, impacting domestic spending.
The robust GDP growth was largely supported by net exports, which grew at a faster pace than imports. Private and government consumption also contributed positively, although growth in gross fixed capital formation slowed.
Looking ahead, MTI remains cautiously optimistic about external demand, citing resilience in advanced and regional economies. However, potential risks include US tariff measures, geopolitical tensions, and financial market volatility. Domestically, manufacturing growth may weaken, and wholesale trade is expected to slow in the second half of 2025. UOB has slightly raised its GDP growth forecasts for 2025 and 2026, anticipating a short-lived technical recession in the latter half of the year.
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