Award Banner
Award Banner

Singapore raises 2024 growth forecast, but expects economy to slow in 2025 amid global uncertainties

Singapore raises 2024 growth forecast, but expects economy to slow in 2025 amid global uncertainties
The third-quarter growth beat both the official advanced estimate of a 4.1 per cent and the upwardly revised 3 per cent expansion in the second quarter.
PHOTO: The Straits Times

SINGAPORE — Singapore's economy blew past estimates for third-quarter growth, leading the Government to raise its forecast for full-year 2024.

But it also tipped growth in 2025 to slow to a range of 1 per cent to 3 per cent range, reflecting heightened global uncertainties generated by Donald Trump's return to the White House, further escalation of conflicts in the Middle East and Ukraine and China's continuing slowdown.

The official 2024 growth forecast was raised to 'around 3.5 per cent' from a previous range of 2-3 per cent, after third-quarter growth accelerated to 5.4 per cent — the strongest year-on-year growth since the fourth quarter of 2021 and higher than the 4.1 per cent initial estimate.

The full-year upgrade marks a strong rebound from 2023 when the economy grew just 1.1 per cent.

PHOTO: Ministry of Trade and Industry

"On balance, Singapore's overall external demand outlook is expected to remain resilient for the rest of 2024," the Ministry of Trade and Industry (MTI) said on Friday (Nov 22).

"Growth in the third quarter was primarily driven by the manufacturing, wholesale trade and finance and insurance sectors, which were bolstered in part by the upturn in the global electronics cycle," Dr Beh Swan Gin, MTI's Permanent Secretary, said at a media briefing.

It brought the growth for the first three quarters to 3.8 per cent year on year, compared with 0.7 per cent for the same period in 2023, said Selina Ling, OCBC's chief economist.

"Given the strong momentum going into the remaining quarter of the year, we cannot rule out the possibility that GDP growth could exceed 3.5 per cent this year," Dr Beh said.

For 2025, however, risks have "tilted to the downside", MTI noted.

A big one is a potential barrage of tariffs from the new Trump administration, which would affect the economies of Singapore's trading partners. Trump has said he wants to slap tariffs of 60 per cent on imports from China and 20 per cent on imports from the rest of the world.

While Trump is likely to impose tariffs, the "US enjoys a trade surplus with Singapore, so that is a positive for us," Beh said.

The US accounts for more than 10 per cent of Singapore's trade and more than 20 per cent of the Republic's investments.

Other downside risks include a further escalation of geopolitical conflicts which could lead to higher oil prices and production costs, as well as policy uncertainty which could dampen global investment and trade.

Disruptions to the global disinflation process could lead to tighter financial conditions, potentially triggering latent vulnerabilities in financial systems. MTI added.

Read Also
singapore
AstraZeneca to open new $2b facility in Tuas by 2029, promises 800 jobs

The result is that overall economic growth in Singapore's key trading partners like the US is expected to ease slightly from 2024's level.

"Against this backdrop, the growth outlook of the manufacturing sector and trade-related services sectors in Singapore remains positive," Dr Beh said.

The electronics cluster is projected to continue to expand, supported by strong global semiconductor demand. This will have positive spillover effects on the precision engineering cluster and the wholesale trade sector.

At the same time, firm order books in the aerospace and marine and offshore engineering segments should drive growth in the transport engineering cluster.

Outward-oriented services sectors such as the information and communications and finance and insurance sectors are projected to register healthy growth.

Tourism-related sectors like the accommodation sector will benefit from the continued recovery in international visitor arrivals, Dr Beh added.

On the other hand, growth in consumer-facing sectors such as the retail trade and food and beverage services sectors is likely to remain weighed down as more locals travel overseas, and slower than expected recovery in international visitor arrivals and weak tourist spending.

Ling expects the Singapore economy to grow 3.1 per cent in the fourth quarter, which would bring full-year 2024 growth to 3.6 per cent. For 2025, she is keeping her 2.7 per cent growth projection.

DBS's economist Chua Han Teng raised his growth forecast for 2024 to 3.8 per cent, and maintained his 2025 prediction at 2.8 per cent.

Growth will be underpinned by the ongoing global tech and electronics upcycle and the gradual cut in interest rates, they said.

"We expect these positive global drivers to spill over positively to Singapore's trade-related (manufacturing, wholesale trade, transport & storage) and modern services (finance & insurance and information & communications) sectors," Chua said.

While he is still expecting the Singapore economy to grow in 2025 - but, like MTI, barring the materialisation of downside risks - he noted that during Trump's first presidency from 2017 to 2021, higher tariffs and heightened policy uncertainty resulted in a global economic slowdown.

Singapore's own growth slowed to below 2 per cent year on year from the fourth quarter of 2018 before bottoming out at 0.8 per cent in the third quarter of 2019, prior to the Covid-19 pandemic.

While a technical recession was avoided, sequential quarter-on-quarter seasonally-adjusted growth was weak, averaging at just 0.1 per cent in the second half of 2019 compared to 0.6 per cent in the first half of the same year.

Read Also
singapore
'Because we are involved, we can shape these emerging processes': PM Wong on participating in platforms like G-20

This article was first published in The Straits Times. Permission required for reproduction.

homepage

trending

trending
    Hong Kong actor Lee Lung Kei still plans to marry fiancee 37 years younger after her release from prison
    2 Taiwanese men allegedly part of a crime syndicate charged with cheating
    AI and art: Studio Ghibli-inspired trend sparks debate on ethics and consent
    Edwin Goh proposes to Rachel Wan, both returning to Singapore after 2 years in Australia
    'My brain got so fried up': Gurmit Singh hit by anxiety attack while acting in his 1st Chinese drama
    How do Trump's tariffs affect you? Here is an explainer
    2 GRCs and 1 SMC: This Woodlands junction separates 3 electoral divisions
    The iconic Milo Van beverage is now available in supermarkets
    21 men in Singapore among 435 arrested in cross-border operation targeting online child sex abuse
    Disney's Beauty and the Beast musical to make Asia premiere in Singapore this December
    What happens next after South Korea's removal of President Yoon?
    Singapore and Malaysia police's video collaboration for Hari Raya goes viral

Singapore

Singapore
    • Singapore deploys 34-member emergency medical team to aid Myanmar quake relief efforts
    • PPP's Goh Meng Seng says MPs work 'extra hard' only before elections for votes, Baey Yam Keng hits back
    • 'She should be with her family': Employer gives maid plane ticket, $800 to return to Myanmar and search for missing mum
    • 'Don't cheat, don't be greedy': Elderly couple in their 90s share secret to longevity with DPM Heng in viral clip
    • Clean-up underway for oil leak from Johor; public advised to avoid water activities at Changi and Pasir Ris beaches
    • Online voting not feasible due to 'voter impersonation' risks: ELD
    • Singapore disappointed with tariffs, will engage US to clarify calculations: DPM Gan
    • 'He needed something to help him fight,' says man who bought Hokkien mee for dying patient
    • MaNaDr admits to lapses, introduces 1-minute minimum teleconsultation rule
    • New bus interchanges in Woodleigh and Pasir Ris to open in late April

Entertainment

Entertainment
    • 'I was right there just 3cm behind her': Exo's Kai recalls joys of simple life during military service, meeting commuter checking him out online
    • E-Junkies: The Click Five will consider making new music if upcoming tour goes well
    • Former NCT idol Lucas to make acting debut in Taiwan
    • 'Blessed beyond measure': Desmond Tan and wife expecting second child
    • Jean-Claude Van Damme accused of having sex with trafficked women
    • Jim Carrey pays tribute to Val Kilmer's 'grace and courage'
    • Val Kilmer reportedly discussed reprising his role as Batman before his death
    • Sum 41 releases final music video before splitting up
    • Probe finds former Smap idol Masahiro Nakai committed sexual assault, victim says 'What I've lost will never be recovered'
    • Gossip mill: Chantalle Ng dating longtime friend, ex-TVB actress now sells chicken feet, Leslie Cheung's partner pays tribute on his 22nd death anniversary

Lifestyle

Lifestyle
    • A first look: Blue Bottle Coffee's cafe at Raffles City, here's what to expect
    • Life-sized dinosaurs, pre-historic plants: Gardens by the Bay to transform into Jurassic World this May
    • 'The menu is a reflection of us': Singaporean woman and American husband open restaurant selling soul food
    • Life after death: Guide to be launched to help parent caregivers plan for autistic children's future
    • Hyundai Santa Fe review: Rugged-looking premium SUV levels up the luxury for Hyundai
    • What to do this weekend (April 4 to 6)
    • Long-range cruiser: GAC E9 luxury MPV with over 1,000km of range now in Singapore
    • Deepal officially arrives in Singapore with opening of new showroom
    • We ask parents how they keep their children's screen time low - here's the lowdown
    • The best new-launch condo layouts we've seen so far in 2025

Digicult

Digicult
    • A $500 wake-up call: How the Samsung Galaxy Ring made me realise my stress
    • Monster Hunter Wilds producer explains how game has remained unique and fresh over 20 years
    • Nintendo Switch 2 to launch in June with US$449.99 price tag
    • Games in April: RPGs, racing and Ronaldo in a fighting game
    • Is it time to get a MacBook at a good price? The M4 MacBook Air says yes
    • China's Baidu launches 2 new AI models as industry competition heats up
    • China's top universities expand enrolment to beef up capabilities in AI, strategic areas
    • International Women's Day: Meet the Singapore women levelling up in gaming
    • US indicts slew of alleged Chinese hackers, sanctions company over spy campaign
    • Meet the women powering innovation in tech in Singapore and beyond

Money

Money
    • Giant deal: Malaysian company to acquire Cold Storage and Giant supermarket chains in Singapore
    • Trump's tariffs provoke trade war threats, fears of pricier iPhones
    • Australia says US tariffs 'not act of a friend' but rules out reciprocal move
    • South Korea's acting president calls for talks with US over tariffs
    • Southeast Asian nations, hit particularly hard by US tariffs, prep for talks with Trump
    • China urges US to immediately lift tariffs, vows retaliation
    • Trump's tariffs stoke global trade war as China and EU vow response
    • HDB to launch 3,000 balance flats in July 2025: What homebuyers need to know
    • With 61 years left on its lease, this Bishan maisonette matches national record at $1.5m
    • Why are homebuyers choosing pricier new launch 2-bedders over resale options in 2025?

Latest

Latest
  • Daily roundup: Singapore and Malaysia police's video collaboration for Hari Raya goes viral — and other top stories today
  • Myanmar junta chief meets foreign leaders in Bangkok as earthquake toll tops 3,100
  • Russian drone barrage hits Kharkiv homes, kills 4 people
  • Trump offers support to French far-right leader Le Pen after her conviction
  • For Trump, tariff gamble brings political risk
  • South Korea's President Yoon ousted
  • Driver of car in Amsterdam explosion may have been attempting suicide, police say
  • Netanyahu may visit US next week, Trump says
  • South Korea's impeached President Yoon faces court ruling to decide his fate

In Case You Missed It

In Case You Missed It
  • Thai woman struggles to evacuate during earthquake while her dog sleeps unfazed
  • Workers painting exterior of Geylang block discover man's skeletal remains in flat
  • 'New, younger' PAP team vows to reclaim WP-controlled Sengkang GRC, says Lam Pin Min
  • New face Jackson Lam 'very good on the ground' and will be asset to Parliament, says Shanmugam
  • Woman who publicised tips on how she evaded GST for luxury purchases fined $18k
  • Powerful quake in Southeast Asia kills several, 81 trapped in Bangkok building rubble
  • Dog dies after being skinned alive in Malaysia, animal welfare group condemns 'barbaric' act
  • Blue for seafood, red for meat: Case partners Koufu to have colour-coded price labels at 'cai fan' stalls
  • WP will campaign for 'responsible and loyal opposition' in GE2025 to earn seats in Parliament, says Pritam
This website is best viewed using the latest versions of web browsers.