Economists slash 2025 GDP outlook to 1.7%
Singapore’s economic prospects have dimmed further as economists lowered both growth and inflation forecasts for 2025, according to the Monetary Authority of Singapore’s latest quarterly survey released Wednesday. The median GDP growth estimate now stands at 1.7%, down sharply from 2.6% in the previous March survey.
The downgrade comes amid rising global geopolitical tensions and trade uncertainty, notably stemming from the impact of U.S. tariffs. In April, the Singaporean government had already revised its full-year growth projection to a range of 0% to 2%.
Monetary policy easing expected in July
The survey, conducted among 20 economists and analysts, also revealed that nearly 60% of respondents anticipate further monetary easing from the MAS at its upcoming policy review next month. This follows previous policy loosening moves in January and April, driven by expectations of slower growth and weaker price pressures.
Singapore’s central bank uses the exchange rate rather than interest rates as its primary policy tool. Additional easing would likely involve a further reduction in the slope of the Singapore dollar nominal effective exchange rate (S$NEER) band to support economic activity.
Inflation outlook softens across the board
Inflation expectations have also been revised downward. The median forecast for headline inflation in 2025 is now 0.9%, with core inflation forecast at 0.8%, both below the central bank’s target range. In March, core inflation hit just 0.5% annually — the lowest in over three years.
The MAS had already forecast 2025 core inflation between 0.5% and 1.5% during its April review. Slower domestic demand, subdued wage growth, and lower global commodity prices are all contributing to weaker inflation pressures.
Trade risks dominate the outlook
According to the MAS survey, the biggest downside risks to Singapore’s economic outlook stem from escalating geopolitical tensions and weakening external demand. Conversely, any easing of trade tensions or stronger-than-expected global growth were listed as the primary upside risks.
Given the city-state’s deep integration into global supply chains and reliance on external demand, trade policy shifts and regional conflict developments will remain critical variables for the economic trajectory in the second half of the year.
