Singapore's economy grows 5.7% in Q4 2025, beating forecasts

Singapore's economy grew by 5.7 per cent in the last quarter of 2025, according to advance estimates from the Ministry of Trade and Industry (MTI) on Friday (Jan 2).

Growth in the fourth quarter marks the fastest quarterly growth in 2025, and also exceeds the 5.0 per cent expansion in the same quarter a year ago.

At the same time, growth for the full year came in at 4.8 per cent, said the ministry.

Aside from exceeding the 4.4 per cent growth recorded in 2024, last year's gross domestic product also exceeds the official forecast that was upgraded to "around 4 per cent" last November.

Prime Minister Lawrence Wong previously revealed the 4.8 per cent full-year growth figure in his New Year's Day message on Wednesday evening, saying that Singapore delivered "stronger-than-expected growth".

Despite the strong growth, PM Wong remained cautious and warned that "sustaining this pace of growth will be challenging", amid fractured trade and geopolitical tensions that are "not transient problems, but permanent features of a fragmented world".

In accordance with a press release from November, MTI expects Singapore's economy to expand by "one to three per cent" in 2026.

It expects a growth in major economies to slow and subsequently moderate the demand for exports from Southeast Asia. 

Manufacturing sees major boost

In the last quarter of 2025, the manufacturing sector saw a strong growth of 15 per cent year-on-year, up from 4.9 per cent expansion in the previous quarter.

Growth during the quarter was largely driven by output expansions in the biomedical manufacturing and electronics clusters, reported MTI. 

The former was primarily supported by robust output growth in the pharmaceuticals segment, while the latter was bolstered by sustained demand for AI-related semiconductors, servers and server-related products. 

The construction sector also expanded by 4.2 per cent year-on-year in the fourth quarter, moderating from the 5.1 per cent growth in the previous quarter. 

All sectors in the services producing industries also recorded growth in the last quarter of 2025, with growth in the wholesale trade sector boosted by strong sales volumes led by the sales of electronic components, telecommunications and computer equipment amid the current AI boom.

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dana.leong@asiaone.com