Singapore has revised its economic growth forecast for 2024, upgrading its expansion projection to approximately 3.5% from an earlier range of 2%-3%, reflecting a faster-than-expected recovery. However, the government expressed caution regarding 2025, warning that global uncertainties—especially the potential for escalating tariffs under a new Trump administration—could pose risks to the economy.
The Ministry of Trade and Industry (MTI) stated that Singapore’s recovery is well-established, with the economy showing resilience in 2024. However, it warned that global volatility, driven by expected trade tensions under President Trump, China’s economic slowdown, and ongoing geopolitical conflicts in the Middle East and Ukraine, could weigh on growth prospects. For 2025, Singapore anticipates growth in the range of 1%-3%.
“Overall, Singapore’s external demand is expected to remain resilient for the remainder of 2024,” the MTI said. “However, global economic uncertainties have increased.”
In its final estimate for the third quarter, Singapore’s GDP grew by 3.2% compared to the previous quarter, surpassing an initial estimate of 2.1% and economists’ predictions of a 2.7% increase. The year-on-year growth for the third quarter stood at 5.4%, better than the earlier official projection of 4.1%, and ahead of the 4.7% median forecast from economists.
The anticipated global trade disruption under Trump’s administration, which could include tariffs targeting various countries, is a key concern. However, Beh Swan Gin, permanent secretary at the MTI, highlighted that the US-Singapore trade relationship may offer some resilience. “The US enjoys a trade surplus with Singapore, so that is a positive for us,” he noted, adding that the US represents 10% of Singapore’s trade and 20% of its foreign investment.
Despite this, the MTI cautioned that geopolitical instability—particularly in the Middle East—could drive up oil prices and production costs, creating inflationary pressures. As an economy that imports a large share of basic goods, Singapore is particularly vulnerable to global inflation risks.
“Disruptions to the global disinflation process could lead to tighter financial conditions for longer and the desynchronization of monetary policies across economies, potentially triggering vulnerabilities in financial systems,” the statement added.
The growth outlook for the remainder of 2024 and into early 2025 is generally positive, bolstered by an uptick in the electronics sector and front-loaded exports ahead of Trump’s proposed tariffs on US imports. However, UOB economist Jester Koh revised the bank’s GDP forecast for next year downward to 2.5% from 2.9%.
DBS Bank kept its 2025 growth forecast at 2.8% but cautioned that the risks of a broader trade conflict under President Trump—who has vowed to impose higher tariffs on China and other global imports—could dampen global economic stability. “The eventual global economic impact would depend on how quickly and in what sequence the new administration’s policies are rolled out,” said DBS economist Chua Han Teng.
Meanwhile, the Monetary Authority of Singapore (MAS), which uses the exchange rate to manage inflation, reiterated that its disinflationary trajectory is “well entrenched” but acknowledged potential upside risks to prices. The MAS kept its monetary policy unchanged for the sixth consecutive review last month, mindful of potential price surges. Singapore’s October consumer price data is set to be released next week, with core inflation still elevated.
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