Singapore GDP rises in Q1
GDP grew by 3.8 per cent year-on-year.
Singapore.- Singapore’s Ministry of Trade and Industry (MTI) has reported that the country’s gross domestic product (GDP) rose by 3.8 per cent year-on-year in the first quarter of the year. The growth was slower than the 5 per cent increase recorded in the previous quarter.
On quarter-on-quarter terms, the economy contracted by 0.8 per cent after the 0.5 per cent expansion in the fourth quarter of 2024. This was due to sequential declines in manufacturing and some outward-oriented services sectors such as finance and insurance along with slowing external demand.
The manufacturing sector grew by 5.0 per cent year-on-year, down from a 7.4 per cent increase in the previous quarter. The construction sector expanded by 4.6 per cent year-on-year. The growth was mainly attributed to an increase in both public and private projects. However, on a quarter-to-quarter basis, the sector contracted by 2.3 per cent.
In the services sectors, the wholesale and retail trade, along with transportation and storage, grew by 4.2 per cent year-on-year, down from 5.6 per cent growth in the previous quarter. All areas except retail trade saw growth. The wholesale trade sector grew due to demand for machinery and supplies. On a quarter-to-quarter basis, the sectors grew by 0.5 per cent.
The group of sectors comprising the information and communications, finance and insurance and professional services sectors grew by 3 per cent year-on-year, down from 4.4 per cent growth in the last quarter. All areas in this group reported growth. The remaining services sectors, including accommodation and food services, real estate, administrative support, and other services, grew by 2.5 per cent year-on-year, the same rate as the previous quarter.
The real estate sector grew strongly due to more private residential property transactions. On a quarter-to-quarter basis, the sector grew by 1.4 per cent.
GDP forecast for full-year 2025 revised
The MTI has lowered its growth forecast for the country’s GDP for this year from between 1 and 3 per cent to 0 to 2 per cent due to the increased global economic uncertainty following US president Donald Trump’s tariff announcements.
It said: “The growth outlook of economies in our region will be negatively affected by a fall in external demand due in part to the tariffs’ wider impact on global trade and growth. Business and consumer sentiments will also be dampened, thereby crimping domestic consumption and investments in many economies.
“The situation will continue to evolve as the US and other economies weigh their moves amidst heightened market volatility. Consequently, there are substantial downside risks in the global economy. First, the spike in uncertainty may lead to a larger-than-expected pullback in economic activity as businesses and households adopt a “wait-and-see” approach before making spending decisions. Second, further tariff measures, including retaliatory tariffs, could lead to a full-blown global trade war, which will upend global supply chains, raise costs and lead to a far sharper global economic slowdown. Third, disruptions to the global disinflation process and rising recession risks in both advanced and emerging markets could lead to destabilising capital flows that could trigger latent vulnerabilities in banking and financial systems.
“Against this backdrop, MTI’s assessment is that the external demand outlook for Singapore for the rest of the year has weakened significantly. This has led to a deterioration in the outlook of outward-oriented sectors in Singapore. In particular, the manufacturing sector is likely to be negatively affected by weaker global demand. This, alongside softening global trade, will also weigh on the growth of the wholesale trade sector. The pullback in global trade will similarly dampen the growth of the transportation & storage sector through its drag on demand for shipping and air cargo services.”
