Singapore’s economy is likely to face a slowdown influenced by US tariffs, while inflation is projected to stay subdued. Effective coordination between fiscal and monetary policies will be crucial in addressing external pressures.
Economic Outlook
In September 2025, Singapore’s economy is forecasted to slow down due to the repercussions of US tariffs, following a strong performance in 2024 and early 2025. Inflation has eased and is expected to remain low. Key policies integrating fiscal, monetary, and macroprudential strategies are essential to mitigate immediate impacts. Tackling external trade disruptions and financial inflows, while addressing structural obstacles, will bolster resilience in the medium term. The ASEAN+3 Macroeconomic Research Office (AMRO) stressed these points during their annual visit to Singapore. Led by experts, discussions centered on coping with shifting global trade and enhancing Singapore’s economic stability.
Challenges and Risks
Projected economic growth is set to moderate in 2025 and 2026. Singapore’s highly open economy makes it susceptible to global trade slowdowns, despite having a lower US tariff burden. The softer demand externally will affect export sectors, impacting domestic investment and consumption. Inflation rates are expected to decrease, aided by strategic policy coordination and easing financial conditions. Nonetheless, external risks persist, including potential US tariff hikes and slower growth among major trading partners. Long-term challenges such as demographic shifts and cybersecurity risks also pose threats, necessitating strategic adjustments.
Policy Measures
Ensuring stability requires well-coordinated policies. Targeted fiscal support, like the Business Adaptation Grant, will cushion shocks. Monetary policies should remain flexible, adapting to economic data to address inflation and growth shifts. Maintaining strict macroprudential measures is crucial to prevent property market overheating and rapid household debt increases. Efforts should also focus on enhancing competitiveness through automation and reskilling initiatives. Regional integration, spearheaded by partnerships and financial innovations, will secure Singapore’s position as a global financial hub. The AMRO team commended Singapore’s proactive steps and collaborative efforts during consultations.
