By Bing Hong Lok
SINGAPORE (Reuters) -Singapore’s economy grew faster than expected into the end of 2024, data showed on Friday, but the government maintained its forecast for slower growth this year and warned of some risks from global trade frictions.
The city-state’s economy grew 5.0% in the fourth quarter from a year earlier, higher than both an official advance estimate of 4.3% and economists’ forecast of 4.7% growth.
Full-year growth accelerated to 4.4% in 2024 from a revised 1.8% in 2023.
The trade ministry maintained its gross domestic product growth forecast for 2025 at 1.0% to 3.0%, and said the external demand outlook for 2025 remained broadly unchanged, although there were risks.
“Uncertainties in the global economy remain significant, with the risks tilted to the downside,” the ministry said in a report, pointing to trade frictions and ongoing geopolitical conflicts that could lead to higher production costs.
The trade ministry’s chief economist told a press conference that while Singapore was not a target of U.S. tariffs, there could be more significant indirect impacts.
“I think the broader concern is with the tariffs, while not targeted at Singapore, there would be indirect impacts on us, obviously, because we are small, we are open,” Yong Yik Wei said, noting the value of Singapore’s trade was three times its GDP.
“So when there are trade frictions that would have an indirect impact on Singapore.”
Last month, the Monetary Authority of Singapore loosened policy settings, saying it expected inflation and growth to be slower than initially forecast for this year.
Annual core inflation eased to a three-year low of 1.8% in December.
At its January policy review, the central bank said GDP was expected to grow “at a slower pace” of 1% to 3% in 2025, and reduced its core inflation forecast for this year to 1.0% to 2.0% from 1.5% to 2.5% previously.
Maybank economist Chua Hak Bin forecast 2025 growth to moderate to a more sustainable pace of 2.6%, with the broadening U.S. tariff war expected to slow growth and trade particularly in the second half of the year.
“Easing monetary conditions, a generous pre-election budget and a step up in construction activity will backstop growth in 2025, cushioning the impact from Trump’s tariff tantrums,” he said.
(Reporting by Bing Hong Lok; Editing by John Mair and Sam Holmes)
