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Investing.com-- Singapore’s economy grew less than expected in the first quarter of 2025 amid weaker manufacturing and construction activity, while the country’s Monetary Authority eased policy slightly on Monday.
Gross domestic product rose 3.8% year-on-year, less than expectations of 4.2% and slower than the 5% seen in the prior quarter, data from Singapore’s Ministry of Trade and Industry showed.
GDP shrank 0.8% quarter-on-quarter, much more than expectations for a drop of 0.4%.
The softer GDP print was also accompanied by a downgrade to Singapore’s 2025 GDP outlook. The MTI cut its 2025 GDP forecast to 0% to 2.0%, from a prior range of 1% to 3%.
The softer outlook comes as China- a major trading partner for Singapore- engages in a bitter trade war with the United States, sparking disruptions in global trade and economic growth. Singapore is especially vulnerable to any disruptions in global trade, while headwinds for China are expected to curb export demand.
“The growth outlook of economies in our region will be negatively affected by a fall in external demand due in part to the tariffs’ wider impact on global trade and growth,” Singapore’s MTI said in a statement.
In the face of a softer economic outlook, Singapore’s central bank- the Monetary Authority of Singapore- slightly loosened its monetary policy on Monday, stating that the global economic outlook had deteriorated in the face of a trade war.
The MAS on Monday said it will further reduce the rate of appreciation of its policy band, the Singapore dollar nominal exchange rate, which is its benchmark tool for monetary policy. Monday’s move is the MAS’ second such move this year, after a similar cut in January.
The MAS trimmed its forecast for consumer price index inflation in 2025, to 0.5% to 1.5%, from a prior range of 1.5% to 2.5%.