Singapore’s economy grew 4.8% in 2025, exceeding forecasts, but the prime minister warns sustaining this rate will be difficult amid global trade uncertainties.
SINGAPORE: Singapore’s economy grew 4.8% in 2025, beating forecasts, Prime Minister Lawrence Wong said.
The figure surpassed the 4.0% growth forecast and showed resilience against initial US tariff impacts.
In his New Year’s message, Wong said 2025 “marked a major turning point in global affairs” as “long standing assumptions about open markets and win-win cooperation were questioned and sometimes rejected.”
He noted the world has “become less predictable and secure,” but added that “despite these external troubles, our economy performed better than expected”.
Wong attributed the stronger performance to a more resilient global economy and US tariffs imposed at lower levels than feared.
“We also benefitted from an AI-related surge in demand for semiconductors and electronics,” he said.
He added that unemployment and inflation remained low, with real incomes rising across the board.
However, Wong warned that sustaining this level of expansion into next year would be “difficult”.
“Fractured trade and geopolitical tensions are not transient problems, but permanent features of a more fragmented world,” he said.
He stated Singapore will face more obstacles to growth and inflationary pressures may intensify.
“As a small and open economy, Singapore cannot fully shield ourselves from these headwinds,” he added.
The trade ministry expects the economy to grow at a slower pace of 1.0-3.0% in 2026 due to a weaker global economy.
Wong said Singapore “must rethink, reset and refresh” its economic strategies to remain competitive.
A government task force is expected to soon release its recommendations on new economic paths.
