Singapore’s economy has demonstrated remarkable resilience, growing by 4.0% in 2024. This figure marks the fastest growth rate since the country began recovering from the pandemic. The acceleration from a modest 1.1% growth in 2023 and a more robust 3.8% in 2022 highlights how effectively the Lion City has navigated global challenges over the past years. Preliminary data from the government reveals that Gross Domestic Product (GDP) expanded by 4.3% in the fourth quarter compared to the same period the previous year, significantly outperforming economists’ median expectations of just 3.3%.
The thriving manufacturing sector has been instrumental in this growth, buoyed by shifting supply chains relocating to Southeast Asia. This trend has been fueled by businesses front-loading shipments in anticipation of potential tariff changes in the U.S. economy. According to Maybank’s economist Chua Hak Bin, these factors are expected to bolster manufacturing growth through at least the first half of 2025, providing a critical stimulus for Singapore’s economy as it seeks to sustain momentum.
However, despite the optimistic outlook, the trade ministry introduced a more conservative forecast for GDP growth in 2025, projecting a range of 1.0% to 3.0%. This cautious projection reflects the potential external headwinds, particularly as the geopolitical landscape evolves with the incoming U.S. administration. OCBC economist Selena Ling opined that while the potential “Trump 2.0 tariffs” pose a risk, Singapore’s economy is resilient enough to weather these challenges without enduring steep losses in growth momentum.
The economy’s performance is further complemented by an annual inflation rate of 1.9% recorded in November, the lowest it has been in nearly three years. This notable decline in inflation provides the Monetary Authority of Singapore (MAS) with room to potentially relax monetary policy during upcoming reviews. However, many analysts suggest that the MAS may adopt a wait-and-see approach, choosing to remain cautious until the economic implications of the new U.S. policies become clearer.
Looking ahead, Singapore’s economic trajectory will likely continue to depend on both domestic resilience and external factors. While the current economic conditions are favorable, risks remain, particularly as trade dynamics evolve worldwide. The government’s proactive measures and the ongoing adaptability of the business sector will be crucial in ensuring sustained growth. As Singapore braces for 2025, stakeholders must remain vigilant and flexible, balancing optimism with preparedness to respond to changing global conditions.