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Singapore has lowered its 2025 GDP growth forecast to 0-2%, down from an earlier 1-3%, due to global economic uncertainty and trade disruptions stemming from the US-China tariff standoff. The Ministry of Trade and Industry cited weakened export demand and falling business confidence, while the central bank eased monetary policy for the second time, reflecting lower inflation and economic activity. First-quarter growth slowed to 3.8%, with a 0.8% contraction from the previous quarter. As global trade weakens, export-reliant nations like Singapore brace for reduced manufacturing output, delayed investments, and wider regional impact on economies like Malaysia and South Korea.
Singapore has revised its GDP growth forecast for 2025 to 0-2%, down from its earlier projection of 1-3%, as concerns over a global economic slowdown mount amid the ongoing US-China trade dispute. The country's Ministry of Trade and Industry (MTI) said the downgrade was largely due to the ripple effect of new US tariffs on global trade, which are hurting both export demand and business confidence. Advertisement
The Monetary Authority of Singapore (MAS), the country's central bank, also responded to the situation by loosening its monetary policy for the second time in a row, citing lower inflation expectations and weakening economic activity.
US President Donald Trump recently imposed a 10% baseline tariff on all countries, with higher duties on nations running large trade surpluses with the US. While Singapore has no tariffs on US imports, it remains subject to the 10% baseline levy, which could hit exports and disrupt global supply chains.
China has retaliated by raising tariffs on US goods to 125%, leading to further instability in global trade. Singapore's trade-driven economy is vulnerable to such shocks, especially as demand from its key partners-the US and China-weakens.
MTI noted that the 'global growth outlook has deteriorated,' and added that falling external demand would affect regional economies, dampening both consumer spending and private investment.
Singapore's economy grew 3.8% in the first quarter of 2025, down from 5% in the previous quarter. On a quarter-on-quarter basis, the economy actually shrank 0.8% due to a drop in manufacturing and a slowdown in service sectors like finance and insurance.
While there is a temporary 90-day pause on additional tariffs from the US for most countries (excluding China), officials remain cautious. They believe trade tensions will continue to drag down business sentiment and delay investment decisions in many parts of the world, including Southeast Asia.
Across Asia, several countries are reviewing their growth estimates for 2025. Malaysia and South Korea have also warned of slower expansion if trade restrictions persist. Export-heavy industries, particularly electronics and machinery, are already seeing delayed orders and price pressures. Central banks in the region are expected to remain cautious, with some considering interest rate adjustments to support growth.
As trade tensions between the world's biggest economies continue, countries like Singapore that rely heavily on exports are likely to face slower growth and increased economic uncertainty in the months ahead.
Source: PTI
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