Singapore: Economic growth slows in the third quarter of 2025
GDP growth exceeds market estimates: According to an advance estimate, Singapore’s GDP increased 2.9% in annual terms in Q3, following a 4.5% expansion in the prior quarter. The reading was the weakest in two years but still exceeded economists’ expectations.
On a seasonally adjusted quarter-on-quarter basis, the economy expanded 1.3% in Q3, following 1.5% growth in the previous quarter.
U.S. protectionism hampers GDP growth, but the IT sector holds up: Compared with the prior quarter’s data, figures in Q3 worsened for industrial activity (+0.6% in annual terms vs +4.8% in Q2), services activity (+3.5% vs +4.5% in Q2) and construction activity (+2.9% vs +6.1% in Q2).
Higher U.S. import tariffs took a toll on the services sector, as shown by the deceleration in the transportation and storage subsector. That said, a pickup in the expansions of other service subsectors provided some relief, reflecting robust growth in the IT and information services segment and an increase in visitor arrivals.
An expenditure-based breakdown will be available by 25 November.
GDP outlook: Our Consensus is for economic growth to lose further momentum in Q4 as the effects of U.S. import tariffs fully materialize. The same factor is expected to weigh on overall economic performance throughout 2026. That said, public spending is projected to rise compared to 2025 levels, as the government seeks to support domestic demand against external trade shocks.
Panelist insight: Commenting on the outlook, Nomura analysts stated:
“Owing to the stronger-than-expected Q3 GDP flash estimate, we raise our full-year 2025 GDP growth forecast significantly […] Our forecast pencils in an easing of sequential growth in Q4 […] indicating weaker momentum amid payback effects from export front-loading. However, this still avoids a contraction, reflecting continued resilience in the domestic-oriented clusters and a supportive fiscal impulse. For 2026, we maintain our forecast for GDP growth to slow […], reflecting the impact of the US tariffs on overall external demand.”