Singapore has revised its 2025 economic growth projection upward following stronger-than-anticipated performance in the first half of the year but cautioned that global trade instability, fueled by U.S. tariff policies, poses significant risks for the months ahead. The Ministry of Trade and Industry adjusted its GDP forecast to a range of 1.5% to 2.5%, up from an earlier estimate of 0% to 2.0%. This marks a rare bright spot for the export-driven economy, which expanded by 4.4% year-on-year in the second quarter after growing 4.1% in the first three months of 2025.
Despite the upgrade, officials emphasized that escalating U.S. trade measures—including recent tariffs targeting semiconductors and pharmaceuticals—could undermine momentum. President Donald Trump recently announced a 100% tariff on foreign-made chips from firms without U.S. investments and proposed levies as high as 250% on imported pharmaceuticals, sectors central to Singapore’s export portfolio. “The economic outlook for the rest of the year remains clouded by uncertainty, with risks tilted to the downside,” the ministry stated, flagging “continued unpredictability” in global trade rules.
The manufacturing sector, a cornerstone of Singapore’s economy, is expected to slow as U.S. tariffs dampen global demand. Wholesale trade and logistics industries may also weaken due to reduced regional stockpiling and softer international commerce. Officials noted that a 90-day pause on U.S. tariffs earlier in the year had temporarily shielded economies by allowing a surge in preemptive exports, but that buffer is now fading.
Singapore’s heavy reliance on cross-border trade—accounting for over 300% of its GDP—leaves it exposed to external shocks. While the tariff hiatus helped sustain growth, projected declines in shipping, semiconductor sales, and pharmaceutical exports signal tougher conditions ahead. The ministry pledged to update forecasts as needed, underscoring the volatility of the current climate.
As one of Southeast Asia’s most trade-dependent nations, Singapore’s revised outlook reflects both resilience and fragility. Robust first-half results offered cautious optimism, but the specter of prolonged U.S.-China tensions and protectionist measures looms large, posing challenges for policymakers navigating an increasingly fragmented global market.
