SINGAPORE: Singapore has downgraded its gross domestic product (GDP) growth forecast for 2025 to 0-2 per cent, the Ministry of Trade and Industry (MTI) said on Monday (Apr 14), citing the impact of US President Donald Trump’s tariffs on global trade. The Monetary Authority of Singapore (MAS), the de facto central bank, has also loosened monetary policy for the second time in a row as economic fears rise due to the trade war brewing between the US and China and lowered core inflation expectations for the year.
MTI pointed out that in February, Singapore’s GDP growth forecast for the year was at 1-3 per cent. This took into account an expected easing in the overall growth of Singapore’s key trading partners, including the US and China.
“Since then, the US has imposed a baseline tariff of 10 per cent on all countries and higher reciprocal tariffs targeted at countries that run large trade surpluses with the US,” said MTI, adding that the tariffs imposed by Trump and the ongoing trade war between the US and China are expected to “weigh significantly on global trade and global economic growth”.
The growth outlook of economies in the region will be “negatively affected” by a fall in external demand partly due to the tariffs’ wider impact on global trade and growth.
“Business and consumer sentiments will also be dampened, thereby crimping domestic consumption and investments in many economies,” said MTI.
Singapore’s economy grew 3.8 per cent in the first quarter of 2025, slower than the 5 per cent growth in the previous quarter, according to advance estimates from the ministry.
On a quarter-on-quarter seasonally adjusted basis, the economy contracted 0.8 per cent compared to the 0.5 per cent growth in the fourth quarter of 2024 due to sequential declines in manufacturing, and some services sectors such as finance and insurance.
Trump has since hit the pause button on imposing higher levies on its trading partners — except China — for 90 days, but Singapore, which currently imposes zero tariffs on US imports, is still subject to the baseline 10 per cent rate.
While MTI noted the temporary 90-day pause, the tariff war between the US and China has also intensified, with China raising duties on US goods to 125 per cent.
“The growth outlook of the US has deteriorated as rising import costs are likely to weaken consumption. China’s growth outlook has also softened as its export growth is expected to stall amidst the trade war with the US,” said the ministry.
