Singapore’s economy outpaced expectations in 2024, expanding by 4.4%, the fastest pace of growth since 2021.

This robust performance was fuelled by strong gains in wholesale trade, finance and insurance, and manufacturing, according to the Ministry of Trade and Industry.

The latest data released on 14 February revised previous estimates upward, with the fourth quarter alone growing 5% year-on-year, exceeding the advance forecast of 4.3%.

While this marks a significant acceleration from 2023’s modest 1.8% expansion, the outlook for 2025 remains tempered with growth projected to range between 1% and 3%.

Key growth drivers: Electronics and financial markets

A major contributor to Singapore’s stellar performance was the electronics sector, which benefited from a global upturn in semiconductor demand.

The machinery, equipment, and supplies segment within wholesale trade also thrived, capitalising on this trend.

Meanwhile, the finance and insurance sector rode a wave of heightened trading activity, buoyed by shifting sentiment in global and local financial markets.

Banks and fund managers reported a surge in net fees and commissions, reflecting increased investor confidence.

However, consumer-facing industries, particularly retail and food and beverage (F&B), struggled.

The contraction in these sectors was partly attributed to Singaporeans redirecting discretionary spending towards overseas travel, a trend that dampened domestic consumption.

Measured growth for Singapore in 2025

Singapore’s economic forecast for 2025 suggests a more measured pace with external factors shaping the trajectory.

The government anticipates a slowdown in key trading partners’ growth, including China and the US.

MTI noted, “there is a large cone of uncertainty surrounding the outlook of the US economy,” highlighting potential policy shifts under the new administration.

In China, GDP expansion is expected to moderate due to slowing merchandise exports and industrial overcapacity.

Meanwhile, US economic growth is projected to ease as labour market tightness subsides and private consumption slows.

Despite these headwinds, Singapore’s manufacturing and trade-related services, particularly electronics, are expected to hold steady.

The demand for semiconductor chips – driven by PCs, smartphones, and data centres – should provide a firm foundation for continued expansion.

Moreover, information and communications, finance, and insurance are forecasted to remain resilient.

By contrast, retail and F&B are likely to remain underwhelming, as overseas travel siphons off local spending.

However, a continued uptick in international visitor arrivals could offer support to these sectors.

Also Read: Green by Design: Singapore poised to lead digital green transition

Labour market stability amidst slower growth

Despite the tempered economic forecast, Singapore’s job market remains stable.

Dr Beh Swan Gin, Permanent Secretary at MTI, assured that key labour indicators such as vacancy rates, unemployment, and retrenchment levels are steady.

“We will monitor these closely, but so far … we don’t see any cause for concern at this point,” he stated.

Global trade and policy uncertainty

Trade relations remain a wildcard for Singapore’s outlook. US President Donald Trump’s recent announcement of “reciprocal tariffs” could disrupt global trade flows.

“Whatever countries charge the United States of America, we will charge them,” he declared, signalling potential headwinds for international trade.

Singapore’s policymakers will be keeping a close eye on these developments as Prime Minister Lawrence Wong prepares to unveil the country’s 2025 budget on February 18.

2025: Balancing opportunities and risks

While Singapore’s economy demonstrated impressive resilience in 2024, the path ahead is marked by both opportunities and challenges.

Strength in manufacturing, trade-related services, and finance should provide stability, but external uncertainties – from US economic policies to China’s slowing momentum – underscore the need for caution.

As Singapore navigates these complexities, businesses and HR leaders will need to stay agile, balancing growth aspirations with prudent risk management.

The city-state’s ability to adapt to shifting global tides will determine whether it can sustain its economic dynamism in the year ahead.