This photograph shows the Marina Bay Sands hotels edifice and Garden by the Bay domes backdropped with the metropolis skyline successful Singapore connected June 27, 2025.
Roslan Rahman | Afp | Getty Images
Singapore's system grew astatine 1.4% successful the 2nd 4th of 2025, avoiding a method recession arsenic it reversed the 0.5% contraction recorded successful the archetypal 3 months of the year.
On a year-over-year basis, the country's system expanded 4.3% successful the 2nd 4th of 2025, accelerating from 4.1% successful the archetypal 3 months and beating expectations. A Reuters canvass of economists had forecasted a 3.5% growth.
A method recession is commonly defined arsenic 2 consecutive quarter-over-quarter declines successful a country's GDP. Analysts polled by Reuters had estimated a 0.6% quarter-over-quarter growth.
The GDP maturation was led by the manufacturing sector, which expanded 5.5% twelvemonth implicit year, up from 4.4% successful the archetypal 4th of 2025. The assemblage makes up astir 17% of the country's economy.
Song Seng Wun, economical advisor astatine CGS International, attributed the reversal successful GDP maturation to the intermission connected "reciprocal tariffs" till Aug. 1, which were announced astatine the commencement of April.
While businesses were rushing their orders successful the archetypal 4th to get up of the "Liberation Day" tariffs, Song told CNBC, they mightiness person chosen to front-load adjacent much exports, "just successful lawsuit the tariff [pause] were not extended."
Shivaan Tandon, markets economist astatine Capital Economics, made a akin reflection astir Singapore benefiting from front-loading. However, helium expects this boost to fade, and "Singapore's export-oriented services assemblage volition driblet backmost and manufacturing enactment volition proceed to struggle."
Besides the front-loading of exports, Singapore's system besides benefited from the de-escalation successful the U.S.-China tariff war, falling involvement rates and a operation boom, said Chua Hak Bin, economist astatine Maybank Investment Banking Group
The operation assemblage expanded 4.4% successful the 2nd quarter, a reversal from the 1.8% contraction successful the archetypal 3 months of the year.
'Uncertainty' inactive ahead
Despite the GDP beat, Singapore's Ministry of Trade and Industry said successful its release that "there remains important uncertainty and downside risks successful the planetary system successful the 2nd fractional of 2025 fixed the deficiency of clarity implicit the tariff policies of the U.S."
Back successful April, MTI had downgraded the country's GDP maturation to 0%-2% for 2025, down from its erstwhile forecast of 1%-3%. Singapore recorded a full-year GDP maturation fig of 4.4% successful 2024.
Unlike different countries successful Southeast Asia that person been deed with "tariff letters," Singapore has not received specified a "letter" from U.S. President Donald Trump.
However, Singapore inactive faces the baseline 10% tariff from the U.S., contempt moving a commercialized shortage with the U.S. and having a escaped commercialized statement since 2004.
CGS' Song said that Singapore's latest GDP maturation rate, on with different encouraging signs successful the economy, suggested "some upside astonishment to the latest MTI forecast of 0%-2%."
Despite that, helium cautioned that the commercialized situation remains precise volatile, and that the ministry volition not beryllium "in a rush" to revise their forecasts conscionable yet.
"Any resistance connected planetary commercialized arsenic a effect of tariffs and different barriers, volition negatively interaction Singapore, [to what] grade we don't know. It's hard to calculate, due to the fact that it tin beryllium merchandise by merchandise assemblage oregon precise state specific."
Capital Economics's Tandon expects Singapore's system to dilatory successful the 2nd fractional of the year.
"With maturation acceptable to weaken and ostentation apt to stay precise low, we deliberation the lawsuit for further monetary loosening from the cardinal slope remains firmly intact," Tandon added.
Maybank's Chua was much optimistic, forecasting GDP maturation of 2.4% successful 2025, supra MTI estimates.
"There volition apt beryllium upgrades to marketplace and authoritative maturation forecasts," helium said, adding that the slope expects immoderate "modest slowdown successful determination commercialized activities, but not a contraction successful the 2nd half."
The Singapore government announced past week the rollout of grants to assistance businesses header with the interaction of planetary commercialized tensions.
The GDP merchandise besides comes up of a monetary argumentation determination by the country's cardinal slope aboriginal successful July.
In its May meeting, the Monetary Authority of Singapore loosened its argumentation for a 2nd straight time, saying that "there are downside risks to Singapore's economical outlook stemming from episodes of fiscal marketplace volatility and a sharper-than-expected autumn successful last request abroad."
The MAS besides warned that a much abrupt oregon persistent weakening successful planetary commercialized volition person a important interaction connected Singapore's trade-related sectors and, successful turn, the broader economy.
Nonetheless, the country's ostentation numbers are supportive of a complaint cut.
Singapore's header ostentation complaint fell to 0.8% successful May, its lowest level since February 2021, portion halfway inflation, which excludes accommodation and backstage transport, came successful astatine 0.6% successful May, compared to 0.7% the period before.
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