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South China Morning Post
14-07-2025
- Business
- South China Morning Post
Singapore dodges recession as economy grows 4.3% in second quarter amid tariff uncertainty
Singapore 's economy grew a faster-than-expected 4.3 per cent in the second quarter year-on-year, preliminary government data showed on Monday, despite a dimming outlook due to global economic uncertainty. The trade ministry's advance estimate for gross domestic product in the April to June period compared to an expected expansion of 3.5 per cent, according to economists polled by Reuters. On a quarter-on-quarter seasonally adjusted basis, GDP grew 1.4 per cent in the April to June period, the advance estimates showed, avoiding a technical recession after the first quarter's revised 0.5 per cent contraction. 'The economy is holding up despite tariff and geopolitical shocks. The de-escalation in the US-China tariff war and front-loading of exports during the 90-day reprieve has cushioned the tariff shocks,' Maybank economist Chua Hak Bin said. On Thursday, Trade Minister Gan Kim Yong said the economy likely held up well in the first half of 2025 as businesses took advantage of the pause in tariffs to front-load exports to the US , but warned that growth could slow in the next six to 12 months. The trade ministry in April downgraded the city state's GDP forecast for 2025 to a range of 0 per cent to 2 per cent from 1 per cent to 3 per cent. Singapore's Deputy Prime Minister and Minister of Trade and Industry Gan Kim Yong said the economy likely held up well in the first half of 2025 as businesses took advantage of the pause in tariffs to front-load exports to the US. Photo: Reuters
South China Morning Post
14-07-2025
- Business
- South China Morning Post
Singapore dodges recession as economy grows 4.3% in second quarter amid tariff uncertainty
Singapore 's economy grew a faster-than-expected 4.3 per cent in the second quarter year-on-year, preliminary government data showed on Monday, despite a dimming outlook due to global economic uncertainty. The trade ministry's advance estimate for gross domestic product in the April to June period compared to an expected expansion of 3.5 per cent, according to economists polled by Reuters. On a quarter-on-quarter seasonally adjusted basis, GDP grew 1.4 per cent in the April to June period, the advance estimates showed, avoiding a technical recession after the first quarter's revised 0.5 per cent contraction. 'The economy is holding up despite tariff and geopolitical shocks. The de-escalation in the US-China tariff war and front-loading of exports during the 90-day reprieve has cushioned the tariff shocks,' Maybank economist Chua Hak Bin said. On Thursday, Trade Minister Gan Kim Yong said the economy likely held up well in the first half of 2025 as businesses took advantage of the pause in tariffs to front-load exports to the US , but warned that growth could slow in the next six to 12 months. The trade ministry in April downgraded the city state's GDP forecast for 2025 to a range of 0 per cent to 2 per cent from 1 per cent to 3 per cent. Singapore's Deputy Prime Minister and Minister of Trade and Industry Gan Kim Yong said the economy likely held up well in the first half of 2025 as businesses took advantage of the pause in tariffs to front-load exports to the US. Photo: Reuters
Business Times
19-06-2025
- Business
- Business Times
Diverging fortunes in Singapore's F&B scene as diners turn to cheaper options
[SINGAPORE] Fortunes are diverging in the local dining scene, with restaurant takings on the decline but other food and beverage (F&B) outlets seeing some recovery, based on official data. Maybank co-head of macro research Chua Hak Bin said: 'Consumers are downtrading to cheaper food options, like food courts and fast food chains, from restaurants.' Sales of Chinese restaurant Ka-Soh, for instance, fell about 15 per cent since January. Weekday deliveries have plunged from six a day to just one, said owner Cedric Tang. From January to April, restaurant sales fell 20.1 per cent with a consistent downward trend, based on the government's Food & Beverage Services Index. In contrast, fast food outlet sales were down 7.5 per cent in the period, but have risen since February. Cafes, food courts and other eateries also picked up since February, and were up 1.4 per cent from the start of the year. Restaurant Association of Singapore (RAS) president Benjamin Boh said the data reflects trends on the ground, though some of the effect is seasonal. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up January sales were strong partly due to Chinese New Year, but February was a short month and March was Ramadan, when outlets serving halal food typically experience a 15 per cent decline in sales, he observed. Yet the current decline goes beyond seasonality. Fast casual chain Jinjja Chicken's sales dipped 5 to 10 per cent during Ramadan last year, but 'took a greater hit' this year, said founder Bernard Tay. Similarly, sales were down 20 to 30 per cent at Enjoy Eating House & Bar, compared with the same period last year. Director James Ang noted that sales have been declining 'for a while', since around the second half of last year. Loh Lik Peng, founder of hospitality brand Unlisted Collection, believes the trend is affecting 'more expensive restaurants' as well as those in the middle. 'If you look at the one-Michelin stars, if you look at the amount of closures in the last year, it tells you that they have been having a very hard time,' he said. 'But if you look at the very top end of the market, and then you look at the restaurants that are more affordable, they could be doing okay.' Smaller appetite to splurge One reason for the decline is that consumers are preferring to spend abroad and tightening their belts at home, said economists and F&B players. Said RAS' Boh: 'Apart from the seasonality factors above, a big factor that is contributing to most categories declining – except the likes of food courts – is also continued tightening of consumer spending.' Some consumers now routinely visit Johor Bahru on weekends to 'get more bang for the buck', he added. 'With that, naturally the likes of restaurants would get hit the most, as weekends are when restaurants would make the most revenue.' Such trips over the Causeway also worry Jinjja Chicken's Tay, who expects the local F&B situation to worsen as transport links between Singapore and Johor Bahru improve. Beyond Malaysia, the strong Singapore dollar has made travel attractive, said CGS International economic adviser Song Seng Wun. 'People are just flying off to Japan, South Korea, or other places overseas to spend.' Even if consumers stay home, per-head spending has fallen. 'At the start of the year, many customers bought multiple bowls of noodles and added desserts,' said Ka-Soh's Tang. 'Now, customers typically buy one bowl of noodles.' Casual cafe chain Grub has also seen customers order less for a meal. Said owner Amanda Phan: 'Previously they might have had a drink or added a dessert; now, they just have water.' Companies, too, are being more cautious about spending and thus cutting back on corporate dining amid economic uncertainty, said Song. For individual restaurants, sales have suffered due to rising competition, as new F&B outlets continue to open. 'Many new outlets opening seems to signal positive prospects for the industry, but big brands are the ones opening these outlets, which kill the business of small and independent restaurants,' said Ka-Soh's Tang. Amid rising competition, Arron Poh, owner of Mexican restaurant Huevos, felt the need to set lower prices for his dishes. Along with the opening of a second outlet last year, these lower prices may have contributed to a 'steady increase' in sales between January and May, he said – while acknowledging that his restaurants buck the trend. Such belt-tightening, however, means that casual outlets have not been hit as hard. While business is 'not as good as last year', sales across Grub's three outlets have not fallen drastically, said Phan. 'I would say that we are probably not a splurge.' Food courts may be doing better because of their 'location and price point', with meals under S$10, said RAS' Boh, adding that their acceptance of Community Development Council vouchers helps too. Similarly, fast food 'is not hit as badly because they can still reach consumers on weekdays' and offer meals for S$5 to S$10, said Boh, who is the managing director of McDonald's Singapore. Spending slowdown expected despite festive bump Maybank's Chua expects consumers to continue preferring cheaper options amid 'a more uncertain economic and job outlook arising from US President Donald Trump's tariff tantrums and the adoption of artificial intelligence'. Similarly, Song expects the industry's struggles to persist over the next 12 months, given worries about geopolitics and downside risks to growth, driven by trade tensions. Said RAS' Boh: 'I foresee that the outlook for sales volume will be choppy and patchy from the second half of the year. Some will do well; some will continue to struggle.' June sales may be soft as families travel during the school holidays, but he expects 'some uptick in July and August' with SG60 celebrations. 'The festive mood plus the disbursement of more goodies will encourage people to spend more in Singapore.' 'Post-August, I believe people will start cutting back again, so that's when the industry will struggle,' he added. Restaurateurs themselves are downbeat. Enjoy Eating House & Bar's Ang said: 'The concerns over cost of living are going to remain. The instability of the financial markets is also going to remain. So it doesn't look like there's anything that will brighten the outlook in the near future.'
Straits Times
13-05-2025
- Business
- Straits Times
Singapore's economic outlook brightens on US-China de-escalation, but tariff uncertainty remains
SINGAPORE - The outlook for Singapore's export-driven economy has brightened as the world's two largest economies stepped back from a tariff war that could collapse trade between them and trigger a global recession, analysts said. The United States and China agreed on May 12 to suspend their triple-digit reciprocal tariffs for 90 days for much lower levies while negotiations continue for a broader and sustainable trade deal. The three-month pause will see tariffs on US exports to China cut to 10 per cent from 125 per cent, while levies on Chinese exports will be reduced to 30 per cent from 145 per cent. However, some analysts warned that the excitement over the deal could wane in coming days as realisation sets in that 90 days may prove too short a period to arrive at a comprehensive trade deal between two countries that consider each other as strategic competitors and have been locked in a trade war since 2017. Still, for investors, the cool-down period represents a reprieve from a scenario where US consumers suffer massive price hikes and empty store shelves, while China endures loss of its biggest export market and a drop in manufacturing output. 'The US-China trade deal is a significant de-escalation and allows trade to resume from what was essentially a deep freeze,' said Mr Chua Hak Bin, regional co-head of macro research at Maybank. He said while a 30 per cent tariff rate on Chinese exports is by no means low - and remains higher than the 10 per cent tariffs faced by most other countries, including Singapore - it will be more manageable than the 145 per cent rate. Mr Adam Pickett, who heads Citibank's global macroeconomic strategy, said the reduction in US tariffs on China represents an effective tariff rate change from 25 per cent to 12 per cent. The effective tariff rate considers both the nominal tariff on a final imported product and any tariffs on imported inputs used in making that product. 'This is a gamechanger for tactical risk,' he said, referring to assets including currencies, credit, stocks and commodities. US dollar surged against its major peers after weeks of persistent decline. The rally saw the Singapore currency ease against the greenback. Join ST's Telegram channel and get the latest breaking news delivered to you.
Business Times
04-05-2025
- Business
- Business Times
GE2025: Political stability, policy continuity should buoy business confidence in Singapore: economists, trade chambers
[SINGAPORE] The clear mandate given to the ruling People's Action Party (PAP) in Singapore's 2025 General Election (GE) should reassure investors and businesses, paving the way for decisive action while signalling stability and continuity, economists and trade chambers said. The PAP secured 65.57 per cent of the popular vote, up from 61.24 per cent in GE2020. With this strong mandate, the business community now expects more action. Said Maybank economist Chua Hak Bin: 'PM Lawrence Wong can form a new Cabinet quickly within the next few weeks and focus on the many economic challenges at hand, particularly the global trade war and tariff shocks.' 'Businesses and investors will be reassured that rationality and prudence will prevail (in Singapore), and fiscal support will be forthcoming if the economic downturn worsens,' he said. Similarly, the Singapore Chinese Chamber of Commerce & Industry said that it looked forward to the formation of a 'capable and united government team' to take Singapore through growing global uncertainty. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up Strong leadership will be critical to sustain growth, strengthen resilience, and reshape Singapore's economy, said the chamber. Reassuring stability 'Markets and businesses will receive the results well, given the policy continuity and political stability,' said Maybank's Chua. He drew a contrast with other democracies that saw 'massive and disruptive shifts' in parties and policies in the last few years, which dampened growth and investments. Similarly, DBS economist Chua Han Teng said that the strong mandate 'will reassure investors of ongoing political stability and policy continuity'. This, he added, 'has the potential to enhance Singapore's already favourable business environment'. Singapore International Chamber Of Commerce CEO Bita Seow said: 'Political transitions here are carefully managed and institutional frameworks are resilient, providing the predictability and certainty investors value.' She noted that political continuity 'strengthens Singapore's brand as a trusted, dependable international business hub', but added: 'However, even in times of leadership change, Singapore's strong institutions, robust governance, and clear national priorities have ensured that the country's reputation remains unshaken.' Sustained fundamentals Beyond the election result, economists and trade chambers stressed that Singapore's fundamentals are what keep it attractive to investors. Said Seow: 'What matters most to businesses is the continuation of core attractiveness of Singapore: integrity, efficiency, and openness to global talent and trade – all of which are deeply entrenched in Singapore's system.' DBS' Chua said the strong rule of law, favourable business environment, access to skilled talent, and high infrastructure connectivity will keep Singapore a 'stable and trusted investment destination' in an increasingly turbulent global economy. But while OCBC's chief economist Selena Ling agreed that a clear mandate 'is likely a plus', she added that economic policy continuity may not necessarily mean an easy path ahead. Singapore's domestic stability does not change how the global order is coming apart, she added – though Singapore still looks attractive to foreign investors as a 'safe harbour' in an uncertain world. Tougher policies? Separately, at a Sunday morning webinar held by scholar collective panellist Bertha Henson suggested that the strong mandate could enable the new PAP leadership to push through unpopular policies. The former journalist cited the precedent of how GE2015 – when the PAP's vote share rose to 69.86 per cent, from 60.14 per cent in 2011 – was followed by 'fierce and tough' policies. While Henson did not cite specific examples, that term of government saw the announcement of the planned goods and services tax hike from 7 to 9 per cent, as well as the passing of the controversial Protection from Online Falsehoods and Manipulation Act in 2019. For more election coverage, visit our GE2025 microsite
