Against this backdrop, Singapore’s growth outlook has turned more cautious. As a small and open economy, Singapore will be heavily impacted by trade conflicts, with external-facing industries such as manufacturing likely to see slower demand. The financial sector could see reduced credit intermediation activity from a slowdown in investment spending, while a sharp rise in risk-off sentiment could affect fees and commissions in the sector.

Growth in the Singapore economy is expected to slow to 0.0–2.0% in 2025 from 4.4% in 2024. As a consequence, Singapore’s output gap will turn negative this year.

Both MAS Core and CPI-All Items inflation fell significantly in Q1, reflecting to a large extent the broad-based moderation in underlying price pressures. Soft domestic spending on F&B services and retail goods as well as receding business cost pressures dampened the pace of consumer price increases.

For the rest of 2025, domestic demand and cost pressures will be more moderate than previously anticipated. Higher global tariffs are assessed to be disinflationary for Singapore on net, as weaker economic activity abroad and in Singapore weighs on imported and domestic cost increases.

Consequently, both MAS Core Inflation and CPI-All Items inflation are now projected to come in lower than previously expected, averaging 0.5–1.5% in 2025. This is a decline from the 2.8% and 2.4% recorded for core and headline inflation in 2024, respectively.