Singapore GDP could grow by up to 3% in 2025: analysts

UOB and RHB said MAS will likely maintain its current policies through mid-2025.

Singapore's GDP is projected to grow by 2.5%-3% in 2025, supported by resilient manufacturing and services sectors but facing risks from US protectionist policies, geopolitical tensions, and slower global growth.

UOB noted that economic growth will expand by 2.5%, reflecting a continuation of resilience in 2024. It also highlights the strong contributions from the manufacturing and services sectors, driven by global demand for electronics and growth in finance, trade, and communication.

The construction sector is also expected to sustain robust growth supported by ongoing infrastructure developments. However, UOB said that external risks such as US protectionist policies under Trump's administration, geopolitical tensions, and a potential peak in the electronics cycle could dampen growth prospects in the latter half of the year.

RHB is slightly more optimistic, projecting Singapore's GDP growth at the upper end of the official forecast range of 1% to 3% for 2025.

Their analysis points to strong performance in the manufacturing sector, particularly in electronics and precision engineering, alongside steady expansion in services and construction.

However, RHB warns that risks remain, including a slowdown in major markets like the US and China, as well as potential disruptions from geopolitical uncertainties and trade tensions.

Despite these challenges, RHB expects exports to drive growth in the first half of the year, buoyed by front-loading of shipments ahead of anticipated US tariffs.

Both UOB and RHB emphasise that the Monetary Authority of Singapore will likely maintain its current policy settings through mid-2025, supported by stabilised core inflation within the 1.5%-2.5% range.

Whilst external risks persist, both institutions maintain a cautiously optimistic outlook for Singapore’s economy in the year ahead.