Singapore’s economic outlook has brightened as economists and analysts revise their growth projections upward, citing reduced uncertainty over international trade tariffs. According to a recent survey by the Monetary Authority of Singapore (MAS), released in September 2025, the city-state’s gross domestic product (GDP) is now expected to grow by 2.4% this year, a significant jump from the 1.7% forecast in June. While this figure remains below the robust 4.4% expansion recorded in 2024, it signals renewed confidence in Singapore’s trade-dependent economy.
Trade Deals Ease Tariff Fears
The upward revision in growth forecasts comes on the heels of recent trade agreements between the United States and several of Singapore’s key trading partners. These deals have alleviated concerns over punitive tariffs that could have disrupted export-driven economies across Asia. Singapore, a global hub for finance and trade, has been particularly vulnerable to such uncertainties, with pharmaceuticals and semiconductors—two of its flagship export sectors—potentially at risk from tariff impositions.
The MAS survey, which captures the insights of 20 industry experts, highlighted easing trade tensions as the most significant positive factor for Singapore’s economy. Respondents noted that the resolution of tariff disputes has provided a more stable environment for exporters, fostering optimism for sustained growth. However, lingering concerns about future tariffs and a potential slowdown in global economic activity remain prominent risks. 
Broader Economic Indicators Show Promise
Beyond headline GDP figures, other economic indicators in the survey paint a cautiously optimistic picture. Non-oil domestic exports, a critical component of Singapore’s economy, are now projected to rise by 2.2% in 2025, up from the earlier estimate of 1.0% in June. This aligns with projections from Enterprise Singapore, the government agency responsible for trade promotion, which anticipates growth in this sector to fall between 1.0% and 3.0% this year.
The manufacturing sector, which has faced headwinds over the past year, is also expected to rebound. Economists now predict a 0.8% expansion in manufacturing output for 2025, reversing the 0.3% contraction forecasted in the previous survey. This turnaround is seen as a positive signal for the broader economy, given manufacturing’s role as a key driver of growth.
Private consumption, another vital pillar of economic activity, is expected to maintain steady growth at 3.1%, unchanged from the June projection. Meanwhile, inflation pressures appear to be moderating, with core inflation forecasted to ease to 0.7% from the earlier estimate of 0.8%, while headline inflation remains steady at 0.9%. These figures suggest that price stability, a longstanding priority for Singapore’s policymakers, is within reach.
Geopolitical Risks and Global Slowdowns Loom Large
Despite the upbeat revisions, the survey respondents flagged several risks that could derail Singapore’s economic recovery. Geopolitical tensions, particularly those affecting trade routes and key export industries, were cited as the most significant threat. The potential for tariffs on pharmaceuticals and semiconductors remains a critical concern, given their outsized contribution to Singapore’s export revenue.
Additionally, a slowdown in global growth could dampen demand for Singapore’s goods and services, while volatility in financial markets poses another layer of uncertainty. These external factors underscore the city-state’s vulnerability to global economic currents, despite its robust domestic fundamentals.
Monetary Policy Expectations
Singapore’s unique monetary policy framework, which focuses on managing the exchange rate rather than interest rates, remains a cornerstone of its economic strategy. The MAS uses the Singapore dollar nominal effective exchange rate (S$NEER) as its primary tool to ensure price stability in the small, open economy. According to the September survey, slightly less than half of the respondents anticipate a further easing of policy settings at the central bank’s October 2025 review, primarily through a flattening of the S$NEER policy band’s slope. However, almost none expect significant changes in January 2026.
This cautious approach reflects the delicate balance the MAS must strike between supporting growth and maintaining stability. While easing trade tensions and positive domestic indicators provide room for optimism, the central bank remains vigilant about external risks that could necessitate a more defensive stance.
Looking Ahead: Opportunities and Challenges
Looking beyond 2025, the survey also upgraded growth expectations for 2026, with GDP expansion now forecasted at 1.9%, up from the previous estimate of 1.7%. This suggests that economists believe the benefits of recent trade agreements and a stabilizing global environment could have a lasting impact, provided no new disruptions emerge.
Among the potential upsides, respondents pointed to a sustained upturn in the global technology cycle as a key driver of growth for Singapore. The city-state’s position as a leader in high-tech industries, particularly semiconductors, positions it to capitalize on renewed demand. Capital inflows, fueled by Singapore’s status as a financial hub, were also cited as a positive factor that could bolster economic activity in the coming years.
Singapore’s Role in a Shifting Global Landscape
Singapore’s economic trajectory is emblematic of broader trends in Asia, where export-reliant economies are navigating a complex web of trade policies, geopolitical tensions, and shifting global demand. The city-state’s ability to secure favorable trade agreements and maintain its competitiveness in high-value sectors like technology and pharmaceuticals will be crucial in sustaining growth.
At the same time, the risks highlighted in the MAS survey serve as a reminder of the fragility of small, open economies in an interconnected world. A downturn in global growth, renewed trade disputes, or unexpected financial market shocks could quickly erode the gains reflected in the latest forecasts. For policymakers, the challenge lies in balancing short-term stimulus with long-term resilience, ensuring that Singapore remains agile in the face of uncertainty.
A Cautious Optimism
The upgraded growth forecasts for 2025 and 2026 reflect a cautious optimism among economists about Singapore’s economic prospects. Easing trade tensions, a recovering manufacturing sector, and steady private consumption provide a solid foundation for growth, even as external risks loom on the horizon. However, the path forward is far from certain, and the city-state must remain vigilant to navigate the challenges of an unpredictable global environment.
As Singapore approaches the MAS’s next policy review in October 2025, all eyes will be on how the central bank calibrates its approach to support growth without compromising stability. For now, the latest survey offers a glimmer of hope that the city-state can weather the storms of global uncertainty and emerge stronger on the other side.
With trade nerves easing and economic indicators trending upward, Singapore’s outlook is brighter than it was just a few months ago. Yet, in a world of rapid change, the question remains: can this momentum be sustained?
