ANN/THE STRAITS TIMES – Private-sector economists forecast Singapore’s economy to grow by 2.6 per cent in 2025, a moderation from the 3.6 per cent growth anticipated for 2024, according to the latest Monetary Authority of Singapore (MAS) survey of professional forecasters released yesterday.
Despite the slowdown, both projections mark an improvement over predictions from September, when economists estimated 2.5 per cent growth for 2025 and 2.6 per cent for 2024. The updated outlook aligns with the Ministry of Trade and Industry’s (MTI) revised forecast in November, which raised the 2024 growth estimate to “around 3.5 per cent”, up from an earlier range of two per cent to three per cent. However, MTI expects economic growth to temper to one per cent to three per cent in 2025 due to cyclical factors.
MTI attributed the anticipated slowdown in 2025 to weaker global dynamics, including a moderation in the United States (US) economy following rapid growth and a deceleration in China’s economy amid declining exports. Uncertainty over US economic policies after Donald Trump’s election victory was also flagged as a risk.
In the MAS survey, geopolitical tensions, including the impact of higher tariffs, emerged as the dominant downside risk, cited by 100 per cent of respondents, a sharp increase from 66.7 per cent in September. The probability of 2025 gross domestic product growth falling within the range of 2.5 per cent to 2.9 per cent rose to 36 per cent, up from 33 per cent in the previous survey.
While Singapore’s economic outlook remains resilient, the data highlights the challenges posed by global headwinds and policy uncertainties in shaping the nation’s growth trajectory.
US President-elect Trump has vowed to raise tariffs to as high as 20 per cent on imports from around the world, and as much as 60 per cent on shipments from China. He takes office on January 20, 2025.
Economist at DBS Bank Han Teng Chua said, “It was unsurprising that geopolitical tensions featured as the most cited downside growth risks to Singapore’s highly trade-dependent economy, following the election of Donald Trump.”
He said trade policy uncertainty was already on the rise before the US elections in November, and will continue elevated with Trump 2.0 promising a wider trade war.
“We therefore also assess significant downside risks to Singapore’s economic growth from the potential effects of higher tariffs and elevated policy uncertainty, especially if global economic growth and trade slow discernibly, as they did in 2019 under Trump 1.0,” Chua said.
The MAS survey also flagged risks of weaker growth in China and domestic cost pressures that may put a drag on Singapore’s economy.
For upside risks to Singapore’s outlook, better-than-expected growth environment was cited as the top factor by 64 per cent of respondents. This was followed by more robust growth in China and a sustained tech cycle upturn.
Inflation in Singapore is seen easing further in 2025 in the survey.
For 2025, overall inflation is seen falling to 1.9 per cent from 2.5 per cent in 2024, while core inflation – which excludes private transport and accommodation costs – is forecast to drop to 1.8 per cent from 2.8 per cent this year.
While the survey showed most economists continue to expect MAS’s stance to remain unchanged in the upcoming monetary policy reviews, some economists do expect the central bank to signal an easing. Most central banks use interest rates to manage their monetary policy, which is aimed at managing inflation.
MAS, however, uses the exchange rate for the same purpose as the bulk of inflation in Singapore is driven by prices of imported goods and services.
