According to advance estimates from the Ministry of Trade and Industry, Singapore's economy showed growth in Q2 2025, avoiding a technical recession.
Growth of Singapore's Economy
In Q2 2025, Singapore's economy grew by 1.4% compared to the previous quarter, an unexpected result as the prior quarter experienced a 0.5% contraction. This growth surpassed economists' expectations of a mere 0.8% increase.
Construction and Services as Growth Drivers
The construction sector emerged as a critical factor for recovery, growing by 4.4% in the quarter, compared to 1.8% in Q1. The expansion was primarily driven by public sector infrastructure projects. Service sectors also performed well, expanding by 4.8% year-on-year, influenced by increased demand for services ahead of the tariff implementation.
Economic Forecasts for H2 2025
Despite the positive Q2 results, analysts warn of slowing growth in the latter half of the year. With global trade conditions and new tariffs on the horizon, further economic deceleration is expected. Bloomberg Economics forecasts the overall economy to grow by only 0.9% for 2025.
Overall, the results from Q2 2025 indicate a temporary improvement in Singapore's economic situation. However, upcoming changes in international trade policies and new customs tariffs could adversely affect future growth.
