Singapore GDP up 4.3% in Q2, well above market expectations amid US tariff pause
Q1 growth revised upwards to 4.1%
[SINGAPORE] The economy expanded 4.3 per cent year on year in the second quarter of 2025, extending the pace of growth in the previous quarter, advance estimates from the Ministry of Trade and Industry (MTI) showed on Monday (Jul 14).
This beat the 3.6 per cent year-on-year growth that private-sector economists were expecting, according to a Bloomberg poll.
Gross domestic product growth for Q1 was also revised upwards to 4.1 per cent, from the earlier estimate of 3.9 per cent.
This brings year-on-year GDP growth for the first half of 2025 to 4.2 per cent.
On a quarter-on-quarter seasonally adjusted basis, the economy grew 1.4 per cent in Q2, a turnaround from the 0.5 per cent contraction in Q1.
MTI did not state whether it was maintaining its official growth forecast for the year at 0 to 2 per cent, but said: “Looking forward, there remains significant uncertainty and downside risks in the global economy in the second half of 2025 given the lack of clarity over the tariff policies of the US.”
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Several economists said they do not expect Singapore’s GDP performance to sustain into H2.
“The biggest challenge will come from US trade policy,” said Sheana Yue, an economist from Oxford Economics.
Even if the tariff levied on Singapore does not exceed 10 per cent, she said the city-state’s trade-dependent economy “isn’t insulated from the indirect effects of higher global tariffs”.
“A particular challenge may arise from the focus on transhipment – Singapore’s re-exporting sector accounts for roughly two-thirds of all trade,” she said.
Jonathan Koh, economist and FX analyst for Asia at Standard Chartered, expects softer growth in H2 amid tariff uncertainty and a likely normalisation of trade and manufacturing activity once front-loading activity fades.
The slowdown in growth may be delayed and spill over into H1 2026 amid a delay in tariffs imposition, he said.
He added that the strong Q2 performance poses upside risks to his full-year outlook of 1 per cent.
OCBC chief economist Selena Ling said she is upgrading her full-year growth forecast to 2.1 per cent, from 1.6 per cent.
It is worth watching if the authorities would be revising their growth forecast at the central bank’s quarterly monetary policy review later this month.
This is based on the “healthy” performance of H1 and upward revision to Q1 data.
“Even coupled with the tariff and geopolitical uncertainties with the looming Aug 1 deadline for reciprocal tariffs which could contribute to a sharp moderation in Singapore’s growth momentum in H2, full-year growth should come in slightly above the 2 per cent year-on-year handle,” she said.
Sectoral performance
On a sectoral basis, the manufacturing industries performed the best year on year, with 5.5 per cent growth in Q2. All clusters, except for chemicals and general manufacturing, recorded higher output.
This was followed by construction at 4.9 per cent year on year, easing slightly from the 5.1 per cent growth in the previous quarter. Q2 expansion was supported by an increase in public-sector construction output, MTI said.
The services sectors expanded 4.1 per cent year on year as a whole in Q2.
Growth was led by the wholesale and retail trade and transportation and storage sectors, which grew 4.8 per cent year on year, up from 4.6 per cent in Q1, in part due to a boost in front-loading activities in the region during the 90-day pause in US reciprocal tariffs.
Barclays regional economist Brian Tan said “the limited data available in the advance estimate suggests the upside surprise came in large part from services activity around shipments from other economies going through Singapore”.
Specifically, he noted a jump in the segment encapsulating wholesale and retail trade as well as transportation and storage to 2.7 per cent on a seasonally adjusted quarterly basis, up from 0.8 per cent in Q1.
The information and communications, finance and insurance, as well as professional services sectors expanded 3.8 per cent on the year, just a notch higher than Q1’s 3.7 per cent.
The group of sectors comprising accommodation and food services, real estate, administrative and support services, as well as other services, grew 3.4 per cent year on year, much faster than the previous quarter’s 2.3 per growth.
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