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 noted that Singapore’s GDP growth forecast for the year was set at 1-3 % in February. This considered an anticipated easing in Singapore’s essential trading associates, including the US and China, as a whole.
According to MTI,” since then, the US has imposed a foundation tax of 10 % on all countries and higher mutual tariffs targeted at nations that have significant trade surpluses with the US,” adding that the Trump administration’s tariffs and the continuing trade war between the US and China are anticipated to “weigh considerably on international trade and economic growth.”
A fall in external demand will “negatively affect” economies in the region’s growth outlook, partly as a result of the tariffs ‘ wider impact on global trade and growth.
According to MTI,” Business and consumer sentiments will also be stifled, crimping domestic consumption and investments in many economies.”
According to advance estimates from the ministry, Singapore’s economy increased by 3.8 % in the first quarter of 2025, less than the 5.5 % growth in the previous quarter.
The economy decreased 0.8 % on a quarter-on-quarter seasonally adjusted basis compared to the 0.5 % growth in the fourth quarter of 2024 as a result of sequential declines in manufacturing and some services, including finance and insurance.
Trump has since pressed the pause button on raising tariffs on its trading partners, aside from China, for 90 days, but Singapore, which currently imposes no tariffs on US imports, is still subject to the current 10 %.
MTI noted the temporary 90-day pause, but China’s tariff war has also gotten worse, with China enforcing more stringent rules for US products.
The US’s growth outlook has declined as a result of rising import costs, which is likely to lower consumption. China’s growth outlook has also slowed, and its export growth is expected to slow in the wake of the US-US trade war, according to the ministry.
