Singapore's annual GDP expands at fastest pace since 2021, lifted by trade, finance and manufacturing sectors

Singapore's GDP expanded by 4.4% in 2024, marking its fastest growth since 2021, government data showed Friday, as it got a boost from wholesale trade, finance and insurance, and manufacturing sectors.

The economy had expanded by 1.8% in 2023.

For the fourth quarter alone, Singapore's GDP grew 5% year on year, higher than the 4.7% forecast by economists polled by Reuters, but lower than the 5.7% expansion seen in the previous quarter.

The 5% growth figure also surpassed advance estimates of 4.3% announced on Jan. 2.

This will be the last piece of key economic data from the city-state, before Prime Minister Lawrence Wong delivers the budget for the country for 2025 on Feb. 18.

Singapore's retail trade sector, as well as the food and beverage sector contracted, partly as people shifted their spending to overseas travel destinations, the ministry added.

The country maintained its GDP growth forecast at 1%-3% for the full year for 2025.

Singapore's ministry of trade and industry said that external demand outlook for 2025 largely remains unchanged, as overall GDP growth in the country's key trading partners is expected to ease from 2024 levels.

"There is a large cone of uncertainty surrounding the outlook of the U.S. economy, with its trajectory depending on the policies of the new U.S. administration," the ministry added.

Singapore expects that China's GDP growth will likely moderate, as merchandise exports and investment growth slows because of tariff hikes and industrial overcapacity.

MTI projects that in 2025, Singapore will see its manufacturing and trade-related services sectors expand, especially for electronics, which will be "supported by robust demand for semiconductor chips in the PC, smartphone and data centre end markets."

Growth is also expected to be seen in sectors, such as information and communications, as well as finance and insurance.

In contrast, the ministry projected that growth in consumer-facing sectors, such as retail trade and food and beverage is likely to remain lackluster.

"This is partly due to locals shifting their spending overseas, even though the continued recovery in international visitor arrivals should provide some support," MTI said.

Chua Hak Bin, analyst at Maybank said that 2025 will be a more "uncertain" year, with full-year GDP growth at 2.6%, closer to the upper end of MTI's predictions. "Trump's broadening tariff war will slow growth and trade in 2025, particularly in the second half," he said.

On the domestic front, easing monetary conditions, a generous pre-election budget and a step-up in construction activity "will backstop growth in 2025, cushioning the impact from Trump's tariff tantrums," Chua added.