Singapore’s outlook: growth, uncertainty

Singapore’s economic outlook for 2025 presents a mixed picture, with steady growth tempered by uncertainty as the government prepares a crucial budget ahead of the next election.

Analysts view the upcoming fiscal plan as a defining test for Prime Minister Lawrence Wong’s leadership, with expectations that it will balance economic resilience, cost management, and future-proofing strategies.

Consumer spending drove growth in 2024

The Singaporean economy grew steadily through 2024, supported by strong consumer spending and increased tax revenues, including a goods and services tax hike. However, economic forecasters have revised Singapore’s 2025 growth projection downward to 2.6%, citing trade headwinds and external risks.

A key challenge for the government will be addressing rising business costs and concerns from small and medium enterprises. A survey by QBE Singapore found that over half of SMEs expect 2025 to be more challenging than the previous year, with profitability pressures and higher operational expenses weighing on confidence.

Trade performance has also weakened, with non-oil domestic exports falling 2.1% in January, missing expectations. Analysts note that slowing global demand, supply chain disruptions, and policy shifts in key markets could continue to pose risks in the months ahead.

Flexibility Singapore’s superpower

Despite these challenges, Singapore continues to emphasize economic adaptability. The country has undergone significant transformation in the 60 years since its independence, and its ability to navigate global disruptions remains a focal point for policymakers.

The upcoming budget is expected to lay out measures to support businesses, enhance workforce development, and ensure long-term fiscal sustainability. With an election on the horizon, the government’s economic strategy will be closely watched as it seeks to maintain stability while addressing structural shifts in the global economy.