Singapore avoids recession as economy grows 4.3% in Q2
What's the story
Singapore's economy has shown stronger-than-expected growth in the second quarter of this year, expanding by 4.3% year-on-year. The figure, released by the trade ministry on Monday, beats economists' expectations of a 3.5% expansion. On a quarter-on-quarter basis, the seasonally adjusted GDP also grew by 1.4% during this period, avoiding a technical recession after a revised contraction of 0.5% in Q1.
Resilience
Economy holding up despite tariff and geopolitical shocks
The robust growth comes despite a dimming outlook due to global economic uncertainties. Maybank economist Chua Hak Bin said, "The economy is holding up despite tariff and geopolitical shocks." He added that the de-escalation in the US-China tariff war and front-loading of exports during a 90-day reprieve have helped cushion these shocks.
Future predictions
Trade Minister's outlook on Singapore's economy
On Thursday, Trade Minister Gan Kim Yong said the economy likely performed well in H1 2025 as businesses took advantage of the tariff pause to front-load exports to the US. However, he cautioned that growth could slow down in the next six to 12 months. In April, the trade ministry had revised Singapore's GDP forecast for 2025 downwards to a range of 0% to 2%, from an earlier prediction of 1% to 3%.
Forecast
Projected GDP for 2025
Chua Hak Bin from Maybank has projected Singapore's GDP for 2025 at 2.4%. He expects the central bank to keep its monetary policy settings unchanged in the upcoming review this month, considering the economy's strength. The forecast comes as US President Donald Trump recently notified over 20 countries of tariffs ranging from 20% to 50% starting August 1, with warnings of retaliatory measures.