Singapore Faces Slower Growth in 2025 Amid Global Trade Tensions, Says IMF

Singapore, May 15, 2025 — Singapore’s economy is expected to slow in 2025 following a strong rebound last year, according to the International Monetary Fund (IMF). The forecast comes amid heightened global trade tensions and rising policy uncertainty that threaten to weigh on the city-state’s trade-reliant economy.

The IMF’s annual consultation mission, led by Masahiro Nozaki, concluded on May 15 after discussions with Singaporean authorities. The team reported that GDP growth rose to 4.4% in 2024, up from 1.8% in 2023, largely driven by a recovery in the global tech sector. However, growth is projected to decelerate to 1.7% in 2025.

Inflation, which fell to 0.9% in March 2025, is expected to remain low throughout the year, with both headline and core inflation hovering around 1%. The subdued inflation outlook reflects weakening domestic demand and falling global commodity prices.

In response to the slowing economy, the Monetary Authority of Singapore (MAS) eased monetary policy in January and April. The IMF noted there is room for further easing but urged the central bank to proceed cautiously due to ongoing uncertainty.

The Fund also endorsed Singapore’s expansionary fiscal policy for FY2025, including continued support for households and businesses and increased infrastructure investment. It highlighted the country’s ample fiscal reserves, noting Singapore is well-equipped to deliver temporary, targeted support if downside risks materialize.

The IMF praised the soundness of Singapore’s financial system, citing strong bank capitalization, liquidity, and profitability. However, it cautioned that global financial tightening could expose vulnerabilities, particularly in real estate and cross-border financial exposures.

The report also acknowledged ongoing government efforts under the Forward Singapore initiative, such as improving social safety nets, supporting families and retirees, and promoting workforce reskilling and AI adoption.

While Singapore remains fundamentally resilient, the IMF warned that escalating trade tensions and tightening financial conditions pose significant risks to growth in the year ahead.