The economy of Singapore recovered in the second quarter of 2025, expanding by 1.4% from the preceding quarter. This prevented the country from a technical recession, as per preliminary data announced by the Ministry of Trade and Industry (MTI) on Sunday.
The growth was more robust than that forecast by most analysts. Most anticipated the economy to expand by a mere 0.8%, following a dismal first quarter when it contracted by 0.5%.
Year-on-year, Singapore’s economy grew 4.3%, topping forecasts once again. That was primarily due to more robust building activity and a steep increase in exports, with companies scrambling to export goods before fresh US tariffs kick in.
Exports and Construction Fuel Growth
The manufacturing industry increased 5.5% in the second quarter over the previous year. That was improved from the 4.4% increase in the last quarter. The majority of manufacturing clusters grew, with the exception of the chemicals and general manufacturing sectors.
Construction also remained strong, growing 4.9% compared to the same period last year. A significant portion of this was because more public sector projects were being implemented throughout the city-state.
Among service industries, transport and trade-related industries increased by 4.8%. The transport sector grew primarily because of higher water transport. The wholesale trade sector also improved with robust machinery and equipment sales.
The MTI added that this growth was buttressed by companies attempting to shift merchandise in a hurry ahead of the expiring current 90-day suspension of new US tariffs.
Tourism and Finance Also Show Gains
Other sectors, such as finance, insurance, and professional services, expanded by 3.8%. Accommodation, food services, and real estate also improved with a 3.4% expansion. This was assisted by the number of international tourists increasing in Singapore.
Hotels, in particular, fared better due to the uptick in visitors. The MTI reported that all major service sectors improved to some extent.
Outlook for Rest of the Year Still Uncertain
Although these figures are encouraging, the government cautioned that there are still challenges. The MTI noted that despite the improvements, there’s still a great deal of uncertainty ahead, particularly since no one knows how US trade policies will develop during the remainder of the year.
Singapore, relying greatly on international trade, is keeping a keen eye on any fresh decisions that may affect exports. Although Singapore recently only incurred a 10% tariff, its economy is still wary of changes in global trade.
More specific information, including news on jobs, inflation, and productivity, will be published in the Singapore Economic Survey this August.
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