Singapore gov’t backs pressured SMEs
Reading Time: 2 minutesSingapore’s business environment is set to face multiple challenges in 2025, with small and medium enterprises (SMEs) expecting continued pressure from rising costs and declining productivity.
Meanwhile, the Singapore Exchange is undergoing a leadership shake-up as it seeks to revive its struggling equities market. Economic forecasts have been adjusted downward, with growth now projected at 2.6%, as external trade risks and geopolitical uncertainties weigh on business sentiment.
A survey by QBE Singapore highlights growing concerns among SMEs, with over half reporting significant operational difficulties. Businesses cite inflationary pressures, supply chain disruptions, and a tight labour market as key constraints. These challenges have prompted renewed discussions on government support measures ahead of the 2025 budget.
Wong to unveil fiscal strategy
As Singaporean Prime Minister Lawrence Wong unveils the latest fiscal plan, policymakers are expected to focus on strengthening business resilience, enhancing digitalisation efforts, and ensuring continued investment in infrastructure to support long-term economic growth.
In the financial sector, the Singapore Exchange is seeing high-profile departures as part of its push to revitalize the stock market. Veteran employees are exiting amid a broader effort to attract more listings and improve market liquidity. The benchmark Straits Times Index closed 0.7% higher on Monday, reflecting broadly positive regional market sentiment.
Singapore’s economic transformation over the past 60 years remains a point of reflection, with analysts noting the country’s ability to adapt to global shifts. However, recent trade data suggests near-term volatility, as non-oil domestic exports recorded a surprise 2.1% decline in January, partly due to seasonal distortions from the Chinese New Year period.
The commercial property sector is also under pressure, with business park vacancies hitting a 14-year high in the fourth quarter of 2024. Savills reports that the island-wide vacancy rate has risen to 22.1%, underscoring shifts in workspace demand as hybrid work models persist.
Singapore doubles down on digital infrastructure
Despite these headwinds, Singapore continues to invest in digital infrastructure. A new report on the country’s data centre landscape provides insights into existing and upcoming facilities, reinforcing the government’s commitment to supporting the digital economy. At the same time, initiatives such as InvoiceNow are driving e-invoicing adoption, helping businesses streamline transactions and improve efficiency.
As Singapore navigates an uncertain economic landscape, government policies and business adaptability will play crucial roles in maintaining stability and growth. The coming months will test the resilience of the city-state’s economy as it seeks to balance short-term challenges with long-term competitiveness.