Singapore’s economy expanded by 4.4% in 2024; outlook for 2025 remains stable

SINGAPORE: Singapore’s economy experienced a significant rebound in 2024, expanding by 4.4%, up from just 1.8% in 2023, according to the latest data from the Ministry of Trade and Industry (MTI). This marks a promising recovery from the previous year’s slow growth, driven by key sectors such as wholesale trade, finance and insurance, and manufacturing.

The economy saw a 5% year-on-year growth in the fourth quarter of 2024, though this was a slight moderation from the 5.7% recorded in the third quarter. On a quarter-on-quarter basis, seasonally adjusted growth decelerated to 0.5%, down from 3% in the preceding quarter, indicating a slowdown in momentum as the year drew to a close.

The expansion of the manufacturing sector was notably supported by the electronics cluster, which saw robust growth due to the global upturn in the electronics cycle. Additionally, the machinery, equipment, and supplies segment within wholesale trade also posted strong performance, benefitting from the global demand for these products.

The finance and insurance sectors also showed resilience, fueled by increased trading activity amidst evolving global and domestic financial market conditions. Strong performance in net fees and commissions, particularly within banks and fund management services, contributed to the overall growth in this area.

However, not all sectors shared in the positive growth. The retail trade and food and beverage services experienced contractions, in part due to an increase in overseas travel by Singapore residents. This shift in consumer behaviour led to a diversion of spending outside the country, placing pressure on domestic demand.

Looking ahead, the Ministry of Trade and Industry has maintained its GDP growth forecast for 2025, projecting an expansion in the range of 1% to 3%. Economic performance will likely be influenced by a combination of global market trends and domestic developments across various sectors. While the outlook remains stable, challenges remain as the global economic landscape continues to evolve.