Singapore’s economy grew 2.9% year-on-year in the third quarter of 2025, surpassing economists’ expectations amid a notable manufacturing sector stall. This growth rate represents a slowdown from the 4.5% expansion in the previous quarter but exceeded the median forecast of 2.0% by private-sector economists. On a quarter-on-quarter seasonally adjusted basis, the economy grew 1.3%, slightly below the 1.5% in Q2.
The manufacturing sector, a key driver of Singapore’s economy, showed zero growth year-on-year, a significant slowdown from a 5% increase in the previous quarter. Output declines were seen in biomedical and general manufacturing clusters, although some segments still expanded. Despite flat year-on-year manufacturing growth, the sector rebounded 6.1% quarter-on-quarter after a contraction in Q2. Other sectors such as construction and services-producing industries contributed positively, with construction growing 3.1% year-on-year albeit slowing from the previous quarter.
The subdued manufacturing performance reflects ongoing pressures from U.S. tariffs imposed under President Donald Trump’s administration, particularly affecting pharmaceutical exports with tariffs reaching 100% on branded products unless production shifts to the U.S. However, industry insiders suggest that many pharmaceutical companies in Singapore have plans to build U.S. manufacturing capacity, mitigating immediate tariff impacts.
The Monetary Authority of Singapore (MAS) maintained its monetary policy stance, keeping the exchange rate policy unchanged. MAS highlighted that while economic growth is stronger than expected, growth is likely to moderate as trade-related activities normalize and the effects of global trade policies fully materialize. Core inflation is projected to remain low but rise gradually through 2026.
Overall, Singapore’s economy demonstrated resilience in Q3 2025, driven by sectors beyond manufacturing, and professionals express cautious optimism about maintaining moderate growth despite external challenges from the U.S. trade environment.
