Singapore Q2 Economy Reverses Shrinkage Trend, Many Firms List Overseas
New data released today shows Singapore’s GDP in Q2 outperformed economist expectations, dodging a technical recession.
However, the government warns that Trump’s tariffs could still pose downside risks to the global economy.
Trump Tariffs Bring Downside Risks
Singapore’s GDP grew 1.4% quarter-on-quarter in Q2 2025, reversing the 0.5% contraction in Q1, avoiding two consecutive quarters of decline that define a technical recession.
Year-on-year, GDP rose 4.3%, up from 4.1% in the prior quarter and beating the 3.5% consensus forecast.
The growth was driven by manufacturing, which jumped 5.5% compared to 4.4% in Q1, accounting for about 17% of the economy.
Despite the upbeat GDP figures, the Ministry of Trade and Industry cautioned in a statement that “global economic uncertainty and downside risks remain significant in the second half of 2025 due to the lack of clarity in U.S. tariff policies.”
Back in April, the ministry had lowered its GDP growth forecast from 1%-3% to 0%-2% for the year, with 2024’s full-year growth at 4.4%.
Unlike other Southeast Asian nations hit by “tariff letters,” Singapore hasn’t received one from Trump—likely due to its trade deficit with the U.S.—but still faces a 10% baseline tariff.
Last week, a special economic resilience task force formed in April to counter U.S. tariffs announced grants to help businesses navigate global trade tensions.
Economic Downside Risks
Before the GDP data release, the Monetary Authority of Singapore (MAS) is set to decide on monetary policy later this month.
In May’s meeting, MAS eased monetary policy for the second straight time, citing “downside risks to the economic outlook due to greater-than-expected volatility in financial markets and weaker overseas final demand.”
MAS also warned that a sudden or prolonged global trade slowdown could significantly impact Singapore’s trade-reliant sectors and the broader economy.
Singapore’s overall inflation rate fell to 0.8% in May, the lowest since February 2021, while core inflation (excluding housing and private transport) dropped to 0.6% from 0.7% in April.
Majority of Firms List Overseas in H1
Despite a sharp rise in the number and fundraising amounts of Singaporean firms listing in the first half of 2025, most activity occurred on overseas exchanges.
Experts say attracting high-growth firms to list locally remains challenging, though policy measures and a strong currency could improve the environment over time.
A report from market analytics firm LSEG shows 16 Singaporean firms listed in H1 2025, a 166.7% jump year-on-year. However, 15 listed on Hong Kong or U.S. exchanges, with only car dealer Vin’s Holdings debuting on the Singapore Exchange.
AGT Partners President Sean Chew noted the long-standing trend of Singaporean firms listing abroad, with Hong Kong and the U.S. as top choices. “These exchanges draw global institutional and retail funds, offering greater liquidity and higher valuations for listed firms.”
Still, Chew pointed out that rising listing costs are cooling investor interest. Recently, several firms have delisted from overseas exchanges—Centurion exited Hong Kong in 2023, and LHN Group is planning to leave too.