Singapore exports expected to slow as US-bound demand moderates

The slowdown comes as the boost from front-loaded US-bound shipments wanes, exposing Singapore’s heavy reliance on external demand.

Singapore’s stellar export performance in early 2025 is expected to lose steam in the second half of the year, according to the Institute of Chartered Accountants in England and Wales (ICAEW).

The slowdown comes as the boost from front-loaded US-bound shipments wanes, exposing Singapore’s heavy reliance on external demand.

In its Southeast Asia Economic Insight Q2 2025 Report, ICAEW notes that Singapore’s goods exports surged 25% year-on-year in April 2025.

However, this spike was driven by companies accelerating shipments ahead of anticipated trade headwinds. As that “sugar rush” fades, export growth is forecast to decelerate sharply in the coming months.

Despite facing the lowest US tariff rates (10%) amongst ASEAN economies, Singapore is deemed the most vulnerable to a pullback in US demand. More than 6% of its GDP is tied to exports headed directly or indirectly to the US, the report highlighted.

Adding to the pressure, exports make up a staggering 124% of Singapore’s GDP, amplifying its exposure to global trade fluctuations. Early indicators of strain are already visible, with Q1 2025 labour data showing employment declines in export-driven sectors like manufacturing, ICT, and professional services.

Still, ICAEW sees a silver lining in the resilient global tech cycle, which is expected to continue supporting Singapore’s electronics exports through 2025.

On the policy front, Singapore remains well-equipped to buffer the slowdown. Fiscal tools such as CDC vouchers and LifeSG credits introduced in Budget 2025 are expected to support domestic demand.

Meanwhile, headline and core inflation are both projected to stay below 1%, potentially allowing the Monetary Authority of Singapore to ease the S$NEER slope, its primary monetary policy lever, possibly to zero in July.

Although Singapore narrowly avoided a technical recession after back-to-back quarters of contraction, ICAEW suggested that robust April export figures and the rerouting of shipments should keep GDP afloat in the near term. Even so, GDP growth is projected to slow to 1.8% in 2025, a sharp drop from 4.4% in 2024.