Singapore's economy grows 4.3% in second quarter, beating expectations

• The advance figure was higher than the 3.5% forecasted by economists polled by Reuters.
• On a quarter-on-quarter basis, Singapore's GDP grew by 1.4%, a turnaround from the 0.5% contraction last quarter.
• The GDP release also comes ahead of a monetary policy decision by the country's central bank later in July.

Singapore's economy grew at 4.3% year over year in the second quarter of the year, accelerating from 4.1% in the first quarter and beating expectations.

The advanced estimates were higher than the 3.5% forecasted by economists polled by Reuters.

On a quarter-on-quarter basis, Singapore's GDP grew by 1.4%, a turnaround from the 0.5% contraction last quarter.

The GDP growth was led by the manufacturing sector, which expanded 5.5% year over year, up from 4.4% in the first quarter of 2025. The sector makes up about 17% of the country's economy.

Despite the GDP beat, Singapore's Ministry of Trade and Industry said in its release that “Looking forward, there remains significant uncertainty and downside risks in the global economy in the second half of 2025 given the lack of clarity over the tariff policies of the U.S.”

Unlike other ASEAN nations that have been hit with “tariff letters,” Singapore has not received such a “letter” from U.S. President Donald Trump.

However, the country still faces the baseline 10% tariff from the U.S., even as the country runs a trade deficit with the U.S. and has a free trade agreement since 2004.

The GDP release also comes ahead of a monetary policy decision by the country's central bank later in July.

In its May meeting, the Monetary Authority of Singapore loosened its monetary policy for a second straight time, saying that “there are downside risks to Singapore's economic outlook stemming from episodes of financial market volatility and a sharper-than-expected fall in final demand abroad.”

The MAS also warned that a more abrupt or persistent weakening in global trade will have a significant impact on Singapore's trade-related sectors and, in turn, the broader economy.

Nonetheless, the country's inflation numbers are supportive of a rate cut.

Singapore's headline inflation rate fell to 0.8% in May, its lowest level since February 2021, while core inflation, which excludes accommodation and private transport, came in at 0.6% in May, compared to 0.7% the month before.