Singapore’s export growth is set to decelerate in the second half of 2025, according to the ICAEW Southeast Asia Economic Insight: Q2 2025 Report. Despite facing the lowest US tariffs in ASEAN, Singapore remains highly exposed to US demand fluctuations, with over 6% of its GDP linked to exports to the US. The report, produced with Asia Decoded, suggests that the initial surge in exports to the US, described as a ‘sugar rush’, is fading, impacting the nation’s economic outlook.
Exports constitute 124% of Singapore’s GDP, and the anticipated slowdown in global exports is expected to affect the local economy. Early signs of this impact are visible in the Q1 labour data, showing a decline in employment growth in export-driven sectors like manufacturing and professional services.
However, Singapore’s fiscal and monetary strategies are poised to support economic growth. Initiatives such as CDC vouchers and LifeSG credits from Budget 2025 aim to mitigate domestic consumption costs. Additionally, favourable inflation trends, with both headline and core inflation projected to remain below 1%, could allow the Monetary Authority of Singapore to ease the S$NEER slope further.
The report also notes a reduced risk of recession, bolstered by a significant rise in goods exports in April and strategic rerouting of shipments to the US. Overall, Singapore’s GDP growth is forecast to slow to 1.8% in 2025 from 4.4% in 2024, reflecting the broader economic challenges and opportunities highlighted in the report.
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