Singapore's Ministry of Trade and Industry (MTI) announced that the country's economy grew by 3.8 percent in the first quarter of 2025 compared to the previous year. However, this growth was slower than the 5.0 percent recorded in the fourth quarter of 2024.
In quarter-on-quarter terms, Singapore's economy contracted by 0.8 percent after recording a growth of 0.5 percent in the previous quarter.
Based on the first quarter performance and increasing global uncertainties, MTI also revised its Gross Domestic Product (GDP) growth forecast for 2025 from 1.0 to 3.0 percent to a lower range of between 0.0 to 2.0 percent.
By sector, the manufacturing sector recorded an annual growth of 5.0 percent but experienced a contraction of 4.9 percent quarterly. The construction sector grew by 4.6 percent year-on-year but contracted by 2.3 percent quarterly.
The wholesale and retail trade and transportation and storage sectors grew by 4.2 percent year-on-year and 0.5 percent quarter-on-quarter. The sectors that include communication, finance and professional services recorded an annual growth of 3.0 percent but declined by 5.0 percent quarter-on-quarter.
The accommodation, real estate, support services and other sectors remained stable with growth of 2.5 percent year-on-year and 1.4 percent quarter-on-quarter.
MTI explained that the revision of the GDP forecast was made due to global geopolitical and economic tensions, especially the escalating trade war between the United States and China.
The United States has imposed a basic tariff of 10 percent on all countries and additional tariffs on countries with which it has a trade surplus. This situation is expected to affect global trade growth and impact external demand for open economies such as Singapore.
Apart from the manufacturing sector, other sectors expected to be affected include wholesale trade, transportation and finance. Investment activities and domestic consumption are also expected to slow due to cautious market sentiment.
Shahriena Shukri is a journalist covering business and economic news in Malaysia, providing insights on market trends, corporate developments, and financial policies. More about Shahriena Shukri.
