First-half GDP boost likely temporary; Republic must stay relevant amid challenges: Chan Chun Sing

Straits Times

8 hours ago

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Singapore's GDP growth hit 4.3 per cent year-on-year in the first half of 2025, which is stronger than expected.
SINGAPORE – Despite the stronger than expected gross domestic product (GDP) growth in the first half of 2025, the boost to the Republic's economy is likely to be temporary.
And Singaporeans will need to be clear about the challenges that lie ahead, said Defence Minister Chan Chun Sing.
He was speaking at the Tanjong Pagar GRC and Queenstown and Radin Mas SMCs' 60th National Day dinner on Aug 16 at Tanjong Pagar Community Club.
On Aug 7, a baseline tariff
of 10 per cent from the United States came into effect for Singapore.
Prime Minister Lawrence Wong
had said on April 8 the tariff would hurt the nation's economy, businesses and workers, and significantly impact the economy's growth.
Speaking to more than 750 residents, partners and volunteers at the dinner, Mr Chan said the good news is that Singapore's GDP growth
hit 4.3 per cent year on year in the first half of 2025, which is stronger than expected.
But part of the growth came from a flurry of front-loading activity – where businesses stepped up production and exports ahead of the tariff hikes.
And that boost is likely to be temporary, he said.
Mr Chan, an MP for Tanjong Pagar GRC, warned his constituents: ' Looking ahead, we are concerned with the uncertainties in the global environment that will slow down the investments or will reduce the confidence of investors. '
He added that the bigger challenge will come from the uncertainty over the tariffs, which could have an impact on the job market or lead to rising inflation.
Mr Chan also cautioned that external parties will continue to try to influence how Singaporeans think.
He said: 'We must make decisions based on our own long-term interests, rather than be swayed by others to do their bidding or to be their proxies.'
Still, he said there was no need for Singaporeans to despair.
'Even in the toughest of times, we must play to our strengths, there will be opportunities for us to seize, and this will depend on what we do together as a nation.'
Pointing out that the world had become increasingly 'transactional', he said the Republic must remain relevant.
Mr Chan, who is also Coordinating Minister for Public Services, said: 'We must develop tangible capabilities, be it on the economic front or on the security front, and offer real value proposition for others who want to partner us.'
He said Singapore has to be consistent and coherent, especially in a world of unpredictability, to nurture stability, both for Singaporeans and for investors.
'Investors are not just looking for the highest returns for their investment, but they are also looking for a reliable place to put their investment, where their investment can be governed by the rule of law, where their intellectual property can be protected,' he said.
To show that Singapore was thinking long-term, the minister said the country needs to invest in its people through education, training, and equipping the workforce with skills to thrive in an evolving world.
Mr Chan said Singapore must continue to manage the country's financial reserves and finances to better prepare for future challenges.
Another way is to invest in major infrastructure projects to maintain global competitiveness. He cited some long-term plans, including the construction of
Changi Airport Terminal 5 and the Tuas mega port.
Mr Chan said opportunities will open up in Singapore as businesses and investors seek to diversify risks, and companies prioritise resilience and preparedness.
He said Singapore can fill that role if the nation remains relevant, offer a stable political system and a coherent government.
Mr Chan was accompanied by his Tanjong Pagar GRC team – Minister of State Alvin Tan, Ms Joan Pereira, Ms Rachel Ong and Mr Foo Cexiang.
Senior Parliamentary Secretary Eric Chua, the MP for Queenstown, and Radin Mas MP Melvin Yong were also there.
At the event, Mr Chan paid tribute to the Malay community and acknowledged its contributions to nation-building.
And he called on all Singaporeans to continue to be united to care for one another.
Said Mr Chan: 'We are not done building Singapore, and I'm sure the younger generation amongst us today will make sure that one day, 40 years later, when we stand outside here, we will see an even better Singapore.'
He added, it will not be measured just in terms of a development in the country's infrastructure, but rather in the way Singaporeans unite to face long-term challenges.
'If we can do that, then I am very sure we can all have that quiet confidence we will make it to SG100,' said Mr Chan.