Singapore’s economy avoided technical recession in the second quarter of 2025, moving back in a positive column with GDP expanding 4.3% year-on-year, according to government data released on Thursday. This marked an improvement from the 4.1% pace recorded in the first quarter, and significantly surpassed the 3.5% consensus forecast from a Reuters poll of economists.
On a quarter-on-quarter, seasonally-adjusted basis, Singapore reversed last quarter’s downturn, posting a 1.4% GDP increase versus a 0.5% contraction in Q1.
A major driver behind this robust performance was the manufacturing sector, which saw a 5.5% year-on-year expansion—up from 4.4% in the previous quarter. Manufacturing now accounts for roughly 17% of Singapore’s overall economy, according to official data.
Despite the strong second quarter showing, the Ministry of Trade and Industry (MTI) maintained a cautious outlook in its statement, warning that “significant uncertainty and downside risks remain in the global economy for the second half of 2025, particularly due to ambiguity surrounding U.S. tariff policy.”
In April, the MTI had revised its GDP growth forecast downward to a range of 0%-2%, compared to an earlier estimate of 1%-3%. Singapore concluded 2024 with full-year GDP growth of 4.4%.
While neighboring Southeast Asian economies have been sent so-called “tariff letters” from U.S. President Donald Trump’s administration, Singapore has so far been spared such direct communication. Nonetheless, it continues to be subjected to a standard 10% U.S. tariff, despite operating under a free trade agreement with the United States since 2004 and maintaining a trade deficit with the U.S.
