Singapore’s economic growth is expected to decelerate to 2.0% in 2025, according to RHB Bank’s latest Global Economics and Market Strategy Report. The revision from the previous forecast of 2.8% reflects potential downside risks, with growth possibly dipping to between 0.5% and 1.0% if trade tensions escalate further.
The Monetary Authority of Singapore’s (MAS) recent decision to slightly reduce the slope of the Singapore dollar nominal effective exchange rate (S$NEER) policy band is seen as a move towards a 0.5% appreciation, down from the prior 1.0%. Barnabas Gan, RHB’s Group Chief Economist and Head of Market Research, noted that MAS is likely to maintain its policy parameters throughout the year, with a possibility of easing in the second half of 2025.
In the first quarter of 2025, Singapore’s GDP expanded by 3.8% year-on-year, a slowdown from the 5.0% growth recorded in the fourth quarter of 2024. This performance fell short of Bloomberg’s consensus estimate of 4.5% and RHB’s own projection of 4.0%.
The report underscores the challenges facing Singapore’s economy amidst global uncertainties. The anticipated slowdown highlights the need for vigilance in monitoring trade developments and policy adjustments. As the year progresses, the economic landscape will be closely watched for any shifts that could impact growth trajectories.
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