Singapore has downgraded its 2025 GDP growth forecast to just 0% to 2%, warning that US President Donald Trump's sweeping tariffs and the intensifying trade war are set to hit global trade and economic momentum hard.
🔻 What’s Behind the Downgrade?
The Ministry of Trade and Industry (MTI) cited the US’s 10% baseline tariff on all imports and even higher reciprocal tariffs for some countries.
The US-China trade war has worsened, with China now imposing up to 125% tariffs on US goods.
These moves are expected to weigh heavily on global trade, hurt business confidence, and slow down investment.
Economic Impact:
Singapore's Q1 GDP grew 3.8%, but this was down from 5% in Q4 2024.
On a quarterly basis, the economy contracted 0.8%, mainly due to declines in manufacturing and financial services.
Monetary Authority of Singapore (MAS) has also eased policy for the second time to cushion the impact.
MTI’s Key Warnings:
Tariffs = Higher Costs + Lower Demand
Businesses may delay spending and expansion.
Consumers are expected to cut back as prices rise.
Trade Tensions = Supply Chain Disruption
A global trade war could upend production and logistics.
Automotive and semiconductor tariffs may further escalate pressure.
Rising Recession Risks
Volatile capital flows and weakening sentiment could expose hidden risks in financial systems.
What’s Next?
Singapore remains subject to the US’s 10% baseline tariff, despite having zero tariffs on US goods.
Trump has paused further tariff hikes (excluding China) for 90 days, but uncertainty lingers.
The situation remains fluid, with Singapore urging businesses to prepare for more volatility ahead.
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