Singapore flags recession risks after strong start to 2025
By Swati Pandey
(Bloomberg) – Singapore flagged the risk of a technical recession due to global tariff tensions even after its economy kick-started 2025 on a faster-than-expected note.
Gross domestic product grew 3.9% in the three months through March from a year earlier, the Ministry of Trade and Industry said in its final estimate on Thursday. The figure compares with a median forecast of a 3.6% growth in a Bloomberg survey of economists, and the government's advanced estimate of 3.8%.
On a seasonally adjusted quarterly basis, GDP fell 0.6%, versus a forecast of 1% contraction. The Singapore dollar and the benchmark Straits Times Index were little changed following the report.
The MTI maintained a recently downgraded forecast for 2025 GDP growth at 0%-2% as US tariffs clouded the outlook for global trade. Prime Minister Lawrence Wong earlier warned that a recession can't be ruled out.
'A technical recession where you have two quarters of consecutive quarter-to-quarter negative growth, that is a possibility,' Beh Swan Gin, permanent secretary at the trade ministry, told reporters. 'That doesn't necessarily equate to a full-blown economic recession' as seen in the year-on-year GDP numbers.
The last time Singapore had a technical recession was at the height of the Covid-19 pandemic in 2020. Prior to that the city-state had four straight quarterly contractions from the June quarter of 2008.
The better-than-expected result in the first quarter was driven by manufacturing and export activity as businesses rushed to avoid the imposition of higher US tariffs.
That momentum is now at 'risk of fading,' said Charu Chanana, the chief investment strategist at Saxo Markets, adding that 'fiscal buffers and proactive policymaking in Singapore offer room to cushion any external shocks.'
The data shows how the US-China trade war and China's sluggish recovery were seeping deeper into the region at the start of the year. Since then, the world's two biggest economies have called a truce, agreeing to a 90-day negotiating window under which they have lowered tariffs on each other's goods.
'The global economic outlook remains clouded by significant uncertainty, with the risks tilted to the downside,' Beh said.
The uncertainty could lead to a larger-than-expected pullback in economic activity, he said, adding that a re-escalation of tariff actions may trigger a full-blown global trade war. He also warned that disruptions to the global disinflation process and recession risks could destabilise capital flows.
Against this background, the growth of 'outward-oriented sectors' such as manufacturing, wholesale trade, transportation and storage, is expected to slow this year. Finance and insurance sectors are also likely to be weighed down by weaker trading activity while the outlook for consumer-facing sectors is lacklustre.
With trade accounting for about three times its GDP, Singapore remains acutely exposed to any sustained slowdown in global commerce. The trade ministry said it will adjust its growth forecast as needed.
Key details from the GDP print:
Manufacturing: up 4% y/y
Construction: up 5.5% y/y
Services-producing industries: up 3.6% y/y
The Monetary Authority of Singapore will make a 'comprehensive assessment' in the run-up to its July policy meeting, MAS Deputy Managing Director Edward Robinson said at the same briefing.
'The policy stance remains appropriate as of now,' he said.
Last month, the MAS eased its monetary policy settings for the second time this year.
Bloomberg Economics expects a 0.9% growth this year, though it sees some upside risk from the 90-day US-China trade truce. Another supportive factor for Singapore was the outcome of this month's election.
'The strong showing of Singapore's ruling People's Action Party in the general election on May 3 reduces uncertainty at a critical juncture — as businesses and investors navigate US President Donald Trump's upending of global trade and security relationships,' said Tamara Mast Henderson, ASEAN economist for Bloomberg Economics.
(Adds market reaction in third paragraph, analyst comment in seventh paragraph, chart.)
More stories like this are available on bloomberg.com
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The Hill
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He noted that in Europe there is much less of a tradition (and tax advantage) of individual philanthropy, with corporations and government entities doing most of the donating or allocating designated tax dollars. Advertisement Even more important is leaving behind the 'mendicant mentality' of fundraising to address a particular problem, and instead encouraging Catholics to invest in the church as a project, he said. Speaking right after Leo's installation ceremony in St. Peter's Square, which drew around 200,000 people, Gahl asked: 'Don't you think there were a lot of people there that would have loved to contribute to that and to the pontificate?' In the U.S., donation baskets are passed around at every Sunday Mass. Not so at the Vatican. Untapped real estate The Vatican has 4,249 properties in Italy and 1,200 more in London, Paris, Geneva and Lausanne, Switzerland. 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Toward that end, the Vatican recently sold the property housing its embassy in Tokyo's high-end Sanbancho neighborhood, near the Imperial Palace, to a developer building a 13-story apartment complex, according to the Kensetsu News trade journal. Advertisement Yet there has long been institutional reluctance to part with even money-losing properties. Witness the Vatican announcement in 2021 that the cash-strapped Fatebenefratelli Catholic hospital in Rome, run by a religious order, would not be sold. Pope Francis simultaneously created a Vatican fundraising foundation to keep it and other Catholic hospitals afloat. 'They have to come to grips with the fact that they own so much real estate that is not serving the mission of the church,' said Fitzgerald, who built a career in real estate private equity.
