Singapore's Strong Manufacturing Spurs Economic Growth in Q2 2025

2025-07-14 economy

Singapore, Monday, 14 July 2025.
Singapore’s manufacturing sector grew by 5.5% in Q2 2025, helping the economy grow 4.3% year-over-year and avoid recession. Uncertainty remains due to unclear U.S. trade policies.

Manufacturing as an Economic Driver

The remarkable 5.5% growth in Singapore’s manufacturing sector during Q2 2025 was a pivotal factor in the nation’s overall economic performance. This sector’s expansion, which makes up approximately 17% of Singapore’s GDP, surpassed the initial growth expectations of 3.5% set by economists [1][2]. Manufacturing growth was especially buoyed by increased production in electronics and precision engineering, areas critical for Singapore’s export-dependent economy [5].

Avoiding a Technical Recession

Singapore avoided a technical recession by recording a 4.3% year-on-year growth in its GDP for the second quarter of 2025, significantly up from the 0.5% contraction in the first quarter [3][8]. The economy also saw a quarter-on-quarter expansion of 1.4% during this period, highlighting resilient economic activity despite external pressures such as global tariff uncertainties [4][9].

Impact of US Tariff Policies

The performance of Singapore’s economy, however, was framed by significant external uncertainties, primarily due to unclear U.S. tariff policies. The Trump administration’s ambiguity concerning tariff impositions posed potential threats to Singapore’s trade-reliant sectors [2][6]. The Ministry of Trade and Industry has indicated that these uncertainties may lead to downside risks in the latter half of the year, despite the current economic gains [4][8].

Looking Ahead: Anticipating Monetary Policy Decisions

As Singapore navigates through these challenging global economic circumstances, the Monetary Authority of Singapore is poised to make crucial policy decisions later this month, which may include measures to support economic stability amid persistent external pressures [8][9]. Meanwhile, the government remains proactive, having already announced grants to assist businesses in mitigating the impacts of global trade tensions [4].

Sources

manufacturing growth Singapore economy