22-05-2025
- Business
- South China Morning Post
Singapore warns of technical recession risk from US tariff tensions
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 per cent 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 per cent growth in a Bloomberg survey of economists, and the government's advanced estimate of 3.8 per cent.
On a seasonally adjusted quarterly basis, GDP fell 0.6 per cent, versus a forecast of 1 per cent contraction.
The MTI maintained a recently downgraded forecast for 2025 GDP growth at 0 per cent-2 per cent as US tariffs clouded the outlook for global trade. Prime Minister
Lawrence Wong earlier warned that a recession cannot 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. 'However, that doesn't necessarily equate to a full-blown economic recession' as seen in the year on year GDP numbers.
First quarter's better-than-expected result was driven by manufacturing and export activity as businesses rushed to avoid the imposition of higher US tariffs.
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.
