Singapore Economy Rose 4.0% In 2024, Inflation At Three-Year Low

Singapore: Singapore's economy recorded robust growth of 4.0 per cent in 2024, a significant improvement from the modest 1.1 per cent expansion in 2023 and 3.8 per cent in 2022, according to preliminary data released by the Ministry of Trade and Industry on Thursday (January 2, 2025).

The fourth quarter saw a year-on-year GDP increase of 4.3 per cent, outperforming economists' median projection of 3.3 per cent in a poll conducted by Reuters. On a seasonally adjusted quarter-on-quarter basis, GDP growth was 0.1 per cent for the October-December period.

"Singapore is starting the year in a sweet spot with growth on a high and inflation at below 2%," Maybank economist Chua Hak Bin said. 

"Shifting supply chains to Southeast Asia and front-loading of shipments ahead of potential higher U.S. tariffs will continue to drive manufacturing growth in the first half of 2025," he added.

The trade ministry said it expected growth of 1.0% to 3.0% in November 2025. OCBC economist Selena Ling described the cautious forecast as realistic given the current external headwinds, which are likely due to Trump 2.0 tariffs and also possibly the fading of front-loading activities. However, she further emphasised that growth is unlikely to slow too significantly in 2025, assuming tariffs do not impact Singapore directly, the 1 per cent year-on-year floor should hold. “My baseline is still about 2 per cent, given a higher base," she said. 

Inflation Drop By 1.9%, Lowest In 3 Years

Inflation in November dropped to an annual rate of 1.9 per cent, the lowest in nearly three years, providing potential leeway for the Monetary Authority of Singapore (MAS) to adjust its monetary policy at its upcoming January meeting. However, analysts suggest the central bank may wait until later in 2025 to evaluate the effects of U.S. President Donald Trump’s policies before making significant changes. The next policy announcement is likely to happen before the end of January.