Singapore's Growth May Slow in 2025 Due to Weak Chip Cycle, Pharmaceutical Exports

Singapore Business Review · Dec 20 06:00

Global demand and elevated geopolitical uncertainties could weigh on export performance in the coming year.

Singapore's economic growth could slow in 2025 due to a downturn in the chip cycle and weaker pharmaceutical exports, Natixis said.

Despite Singapore's economic resilience, Natixis noted soft global demand and elevated geopolitical uncertainties could weigh on export performance in the coming year.

It said accommodative policies are likely, as the Monetary Authority of Singapore (MAS) is expected to ease monetary policy in 2025.

This shift aims to counter the weakening trade environment and support domestic stability, particularly ahead of the general elections in November 2025.

Cost-of-living concerns remain prominent following the GST hike to 9%, with elevated rents and inflation pressures impacting households. However, Natixis forecasts inflation to ease to 2.2% in 2025, down from 2.5% in 2024, offering slight relief to consumers.

On a positive note, Natixis highlighted Singapore's advantage amidst US-China tensions, as the city-state continues to attract diversification flows from companies and investors seeking alternatives to Hong Kong.

With expectations of monetary easing, the Singapore dollar may face depreciation pressures in 2025, particularly as elevated US interest rates and a softer yuan add further challenges.

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Singapore's Growth May Slow in 2025 Due to Weak Chip Cycle, Pharmaceutical Exports

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