Against this backdrop, Singapore’s growth is expected to moderate over the rest of the year. Externally-oriented sectors are likely to see softer activity as front-loading effects fade and global demand weakens. These external headwinds may spill over into domestic-oriented sectors such as retail and F&B, though generally healthy household balance sheets and government support measures should help cushion the impact. Some pockets of support also remain in the construction sector as well as the sentiment-sensitive segments within the financial sector.

Reflecting the stronger-than-expected outturns in H1, Singapore’s GDP growth for the whole of 2025 is expected to be firmer than previously envisaged. Accordingly, the level of output should come in close to potential when averaged across the full year, compared to the negative output gap expected in the April Review.

MAS Core Inflation held steady in Q2, as a narrow range of administrative price increases balanced out easing inflation across most goods and services. Overall, inflation stayed low due to subdued imported and domestic costs, alongside weak demand for certain CPI items.

For 2025, both MAS Core and CPI-All Items inflation are projected to average 0.5–1.5%. External inflationary pressures are expected to stay benign, as softer global demand and ample supply weigh on regional goods prices. Domestic cost pressures should also stay modest, supported by moderating wage growth and improved labour productivity.