Singapore’s economy expanded by 2.9 percent in the third quarter, marking a slowdown from the previous quarter, according to preliminary official data released on Tuesday. The slowdown is attributed to the impact of US tariffs on key manufacturing sectors. As a heavily trade-reliant economy, Singapore is vulnerable to global trade disruptions, despite facing a relatively low baseline tariff of 10 percent imposed by US President Donald Trump.
The country’s gross domestic product (GDP) growth for the July-September period, although beating economists’ forecasts, was the slowest this year. It followed a 4.1 percent growth in the first quarter and a 4.5 percent growth in the second quarter, as indicated by trade ministry data. The export-driven manufacturing sector, a critical component of Singapore’s economy, was flat year-on-year in the third quarter, compared to a 5.0 percent growth in the second quarter.
The trade ministry attributed the sluggish growth to output declines in the biomedical manufacturing and general manufacturing cluster. These preliminary GDP figures, based on the economic performance of the first two months of the quarter, are subject to revision. They reflect softer shipments to Singapore’s key export markets, as data released last month showed.
Non-oil domestic exports shrunk by 11.3 percent in August, accelerating from a 4.7 percent fall in July. Exports to the United States and China, crucial markets for Singapore, tumbled by nearly 29 percent and 21.5 percent, respectively, in August. These declines extended the drops observed in July, highlighting the challenges posed by global trade uncertainties.
In August, Singapore’s trade ministry revised its 2025 growth forecast to a range of 1.5-2.5 percent, up from an earlier range of 0-2.0 percent. However, the ministry cautioned that global uncertainties, including trade tensions, continue to pose risks to the economy. As Singapore navigates these challenges, the impact of US tariffs and the ongoing trade dynamics will be closely watched for their implications on the country’s economic trajectory.