Singapore’s economy ended 2024 on a stronger-than-expected note, positioning the government to better navigate global challenges, including U.S. tariffs and voter concerns over rising living costs ahead of an election year. The country’s GDP grew by 5% in the final quarter of the year, surpassing the government’s initial estimate of 4.3% and matching economists’ median forecast, the Ministry of Trade and Industry reported on Friday.
The positive fourth-quarter performance bolsters Singapore’s resilience against global headwinds, including the slowdown in China and the trade tensions exacerbated by U.S. President Donald Trump’s tariffs. Trade is critical to Singapore’s economy, accounting for three times its GDP, and tariffs could still present a challenge, according to Yong Yik Wei, the chief economist at the Ministry of Trade and Industry. “While the overall effect of the current tariff measures may be modestly negative, we are monitoring the situation closely,” Yong said after the data release.
For the full year, Singapore’s GDP expanded by 4.4%, marking the fastest pace of growth since 2021 and exceeding both the government’s 4% forecast and economists’ expectations. On a quarterly basis, the economy grew by 0.5%, slightly below the anticipated 0.8% increase.
The government continues to forecast 2025 growth in the range of 1%-3%, acknowledging that any new U.S. tariffs will likely take time to materialize. The Ministry of Trade and Industry is closely monitoring these developments to adjust its forecasts for 2026 if needed.
Looking ahead, Singapore expects its manufacturing and trade-related services sectors to continue growing in 2025, though at a slower pace compared to 2024 levels, as indicated in the ministry’s earlier statement on Friday.
Despite the economic optimism, rising costs—from housing to food—remain a significant concern for many Singaporeans, particularly in the lead-up to the November election. Prime Minister Lawrence Wong is expected to address these concerns in his budget speech on February 18, with new measures aimed at supporting vulnerable citizens and enhancing the country’s competitiveness.
Bloomberg Economics anticipates that Singapore’s sharp rebound in 2024 may lose momentum this year, given its high exposure to global trade and the growing protectionist sentiment worldwide. In response to economic pressures, the Monetary Authority of Singapore (MAS) has already adopted a more accommodative stance. Last month, the MAS reduced the slope of its currency band, signaling a slower pace of appreciation for the Singapore dollar against the currencies of its key trading partners.
The MAS also lowered its core inflation forecast for 2025, projecting an average range of 1%-2%, down from the previous estimate of 1.5%-2.5%. The central bank’s next policy meeting is scheduled for April.
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