Singapore’s Ministry of Trade and Industry (MTI) announced on Monday that they’re expecting the nation’s GDP growth in 2025 to only be between 0 and 2 percent.
The MTI is downgrading the growth forecast which had previously been set in between 1 percent and 3 percent.
This comes after the Singapore economy grew by 3.8 percent year on year in the fourth quarter of 2025. This is slower than the 5 percent growth seen in the previous quarter. The MTI indicates this was due to sequential declines in manufacturing and some outward-oriented services such as finance and insurance, along with slowing external demand.
In February, the MTI had estimated GDP growth of 1 percent to 3 percent for FY25, taking into account an expected easing in the overall growth of Singapore’s key trading partners. The MTI at the time flagged uncertainties and downside risks to the global economy based on the lack of clarity over policies by the new US administration, alongside trade frictions.
After US President Donald Trump decided to impose a baseline tariff of 10 percent on all countries – later rolled back for a 90 day period (except for China), product specific tariffs implemented earlier by the US still remain in place, with the MTI indicating more could be introduced in the coming months.
The MTI now indicates that the external demand outlook for Singapore for the rest of the year has weakened significantly. Aside from the effect on manufacturing and wholesale trade, the transportation and storage sector could also be dampened, while the finance and insurance sector could see weaker trading activity. Capital investment spending is also expected to dampen.
Hopes for future increase in tourism spending
While the short-term outlook is grim, tourism spending in Singapore is projected to reach between SG$47 billion ($35.7 billion) and SG$50 billion ($38 billion) by 2040 – a 1.7-fold increase from 2024’s figure.
This comes after Singapore recorded an all-time high of SG$29.8 billion ($22.64 billion) in tourism receipts in 2024, driven by spend from China, Indonesia and Australia.
During the year international visitor arrivals reached 16.5 million.
Going towards 2040, Singapore is hoping to see an increase in MICE tourism receipts, which previously were around 4 percent of the total, and could increase to 10 percent by 2040.
Expectations for tourism receipts in 2025 are between SG$29 billion ($22 billion) and SG$30.5 billion ($23.17 billion), according to the Singapore Tourism Board.
