Singapore raises annual growth forecast as third-quarter GDP tops expectations

Singapore raised its 2025 economical outlook Friday aft stronger maturation successful the 3rd quarter, but warned that enlargement is apt to chill successful 2026 arsenic the U.S. tariffs measurement connected planetary demand.

The Ministry of Trade and Industry upgraded Singapore's 2025 GDP forecast to astir 4%, up from an earlier scope of 1.5% to 2.5%, mostly acknowledgment to the better-than-expected economical maturation successful the 3rd quarter.

"Global economical conditions person turned retired to beryllium much resilient than expected," the MTI said successful a statement, citing stronger request from cardinal trading partners, stronger request for semiconductor exports tied to the artificial-intelligence roar and the de-escalation successful U.S.-China commercialized tensions.

The system grew 4.2% successful the July-to-September play from a twelvemonth earlier, extending the 2nd quarter's 4.7% increase, authorities information showed. The third-quarter maturation complaint besides exceeded the authoritative advance estimation of 2.9% compiled successful October and economists' forecast of 4.0% successful a Reuters poll, contempt elevated commercialized headwinds during the 3 months.

For 2026, the authorities expected Singapore's system to turn astatine a scope of 1% to 3%.

On a quarter-on-quarter, seasonally adjusted basis, GDP expanded 2.4%, up from 1.7% successful the 2nd quarter.

The third-quarter maturation was chiefly driven by manufacturing and export demand, the authorities said, noting that electronics manufacturing expanded by 6.1%, buoyed by higher request for AI-related semiconductors and servers.

"For the remainder of the year, request for AI-related electronics should proceed to enactment our manufacturing and wholesale commercialized sectors," the ministry said.

For the archetypal 9 months of 2025, the system grew 4.3% from a twelvemonth earlier.

Although Singapore's system is expected to clasp up comparatively good this year, officials cautioned that the maturation outlook remains clouded for 2026.

"GDP maturation for astir of Singapore's cardinal trading partners is apt to beryllium little than that successful 2025 arsenic the interaction of the US' tariffs is expected to beryllium much pronounced," the MTI said, cautioning that planetary economical uncertainty remains elevated.

Singapore's exports to the U.S. are subject to a 10% baseline tariff, comparatively debased compared with the rates imposed connected its Southeast Asian neighbors.

But sectoral levies, including a 100% tariff connected branded drugs that has been enactment connected hold, stay a cardinal root of interest for Singapore's economy.

"For now, there's inactive not a batch of clarity astir however America intends to use these sectoral tariffs – for example, wherever pharmaceuticals are concerned," Prime Minister Lawrence Wong said past month, noting that Singapore's commercialized talks with Washington were astatine "a precise aboriginal stage."

The implementation of this tariff has been delayed to let pharmaceutical companies clip to negociate exemptions with the U.S. administration.

In the 3rd quarter, non-oil home exports (NODX) slipped 3.3% aft a 7% emergence successful the April-to-June period, weighed down by weaker pharmaceutical and petrochemical exports. Shipments to the U.S. fell 30.7% implicit the aforesaid period.

But successful October, NODX rebounded, surging 22.2% from a twelvemonth earlier, driven by exports of non-monetary golden and physics products. Shipments to the U.S. declined 12.5% successful October from a twelvemonth earlier.

The Monetary Authority of Singapore is expected to support its monetary argumentation stance unchanged successful its adjacent gathering successful January, arsenic the maturation momentum remains mostly intact, Lloyd Chan, a strategist astatine MUFG Bank, said successful a enactment Friday.

The cardinal slope near the policy unchanged astatine its last reappraisal of the twelvemonth successful October, citing unchangeable economical show and subdued inflation.

Singapore's user terms ostentation rose 0.7% successful September from a twelvemonth earlier, successful enactment with the cardinal bank's estimation of 0.5% to 1% this year.