SINGAPORE: According to a report by RHB, Singapore’s full-year industrial production (IP) growth for 2025 is projected at 3%, aligning with an expected 3% growth in gross domestic product (GDP). The bank also anticipates that GDP growth for the fourth quarter (4Q24) and full year 2024 will be revised upward from the Ministry of Trade and Industry’s (MTI) advance estimates.
Singapore’s industrial sector ended 2024 on a strong note, with December’s IP rising by 10.6% year-on-year (YoY). This significantly exceeded market expectations of a 6.4% YoY increase and RHB’s forecast of 3.3% YoY. However, it reflected a slight dip from the revised 10.8% YoY growth in November.
The robust performance in December was fuelled mainly by double-digit growth in the electronics and transport engineering sectors. These sectors were crucial in bolstering Singapore’s industrial expansion, reflecting sustained global demand for semiconductors and engineering solutions.
The electronics sector, which accounts for nearly half of Singapore’s manufacturing output, expanded by 14.3% year over year. While this was a notable increase, it was slower than the 31.3% YoY surge in November.
Meanwhile, precision and transport engineering also emerged as key contributors to Singapore’s industrial growth, benefiting from strong global trade and increasing demand for high-tech products.
Singapore’s economic outlook is expected to remain positive, supported by a favourable global trade environment. The US economy is projected to grow by 2% in 2025, while China’s GDP is expected to expand by 4.8%. Easing global monetary conditions will likely boost economic activity further, creating a conducive environment for Singapore’s trade-dependent sectors.
Despite the optimistic projections, potential risks could challenge Singapore’s growth trajectory. Geopolitical uncertainties, particularly concerning trade protectionist policies under a possible second Trump administration in the US, may impact global trade flows. Given Singapore’s reliance on exports, any disruptions in international trade policies could threaten its economic stability.
Overall, while Singapore’s industrial production and GDP are poised for steady growth in 2025, external risks will remain a key factor to watch in the coming months.