Singapore’s economy grew 2.9% in third quarter, beating expectations

SINGAPORE: Singapore’s economy grew by 2.9 per cent in the third quarter of 2025, slower than the revised 4.5 per cent growth in the previous quarter, according to advance estimates from the Ministry of Trade and Industry (MTI) released on Tuesday (Oct 14).

The GDP performance was better than expected, surpassing economists' forecast of 2 per cent in a Bloomberg poll.

On a quarter-on-quarter seasonally adjusted basis, the economy expanded by 1.3 per cent, slightly slower than the 1.5 per cent growth in the second quarter.

MTI said in August that the economy grew 4.4 per cent in Q2, a slight upgrade from the advance estimate for the quarter of 4.3 per cent. GDP growth for the first quarter was 4.1 per cent.

Advance GDP estimates are computed largely from data in the first two months of the quarter. They are intended as an early indication of growth in the quarter and are subject to revision.

In August, MTI upgraded Singapore’s GDP growth forecast for the year to 1.5 per cent to 2.5 per cent, following the better-than-expected performance of the country's economy in the first half of 2025. The ministry previously had a forecast of 0 per cent to 2 per cent for the year.

OCBC economist Selena Ling said the headwinds from US President Donald Trump's sweeping tariffs were not as bad as previously feared.

"Tariff concerns, while lingering, have subsided slightly since April's 'liberation day'," said Ms Ling, the bank's chief economist and head of global markets research and strategy.

"Front loading has gone on longer, tariffs have come down from April levels, the US economy has been a bit more resilient despite the slowdown."

She expects the economy to post growth of 3 per cent this year, "even if Q4 growth moderates to below 1 per cent year-on-year".

Maybank economist Chua Hak Bin was more optimistic, expecting GDP to come in closer to 3.5 per cent, higher than his "already bullish GDP forecast of 3.2 per cent for the year".

SECTORS

Tuesday's data showed that the manufacturing sector escaped an outright contraction. 

Growth was flat at 0 per cent, compared with the 5 per cent expansion in the previous quarter. This marks the weakest manufacturing performance since the second quarter of 2024.

“Growth was weighed down by output declines in the biomedical manufacturing and general manufacturing clusters, even as output in the other manufacturing clusters expanded,” said MTI.

The sector grew by 6.1 per cent on a quarter-on-quarter seasonally adjusted basis, a turnaround from the 0.7 per cent contraction in the second quarter.

The construction sector grew by 3.1 per cent in the third quarter, down from the 6.2 per cent growth in the previous quarter.

“Growth during the quarter was supported by an increase in both public and private sector construction output,” said MTI.

However, the sector shrank by 1.2 per cent on a quarter-on-quarter seasonally adjusted basis, a reversal from the 6.5 per cent growth recorded in Q2.

The group of services sectors, comprising the wholesale and retail trade and transportation and storage sectors, collectively expanded by 2.5 per cent in Q3, easing from the 4.9 per cent growth in the previous quarter.

The ministry attributed the growth in the wholesale trade sector to the machinery, equipment and supplies segment, while growth in the transportation and storage sector was largely supported by the water and air transport segments. 

On a quarter-on-quarter seasonally adjusted basis, the wholesale and retail trade, and transportation and storage sectors as a whole contracted by 1.2 per cent, a pullback from the 2.8 per cent expansion in the second quarter.

The group of sectors comprising the information and communications, finance and insurance and professional services sectors grew by 4.4 per cent in the third quarter, slightly higher than the 4.3 per cent growth in the second quarter.

“Growth in the information and communications sector was primarily driven by the IT and information services segment, while that in the professional services sector was largely supported by the head offices and business representative offices segment,” said MTI.

“Meanwhile, growth in the finance and insurance sector was led by the banking and activities auxiliary to financial services segments.”

This group of sectors expanded by 1.3 per cent on a quarter-on-quarter seasonally adjusted basis, down from the 1.6 per cent growth in Q2.

The remaining group of services sectors - accommodation and food services, real estate, administrative and support services and other services sectors - expanded by 4.1 per cent in Q3, following the 4 per cent expansion in the preceding quarter.

All sectors within the group, except for the food and beverage services sector, grew during the quarter, said MTI.

“In particular, the accommodation sector expanded on the back of an increase in international visitor arrivals,” the ministry added.

On a quarter-on-quarter seasonally adjusted basis, these sectors collectively grew by 1.3 per cent, the same pace of growth as that recorded in the second quarter.