Economic Performance - Singapore's GDP grew by 3.8% year-on-year in Q1, down from 5.0% in the previous quarter [1] - The Ministry of Trade and Industry (MTI) revised the GDP growth forecast for the year from 1.0%-3.0% to 0.0%-2.0% due to uncertainties such as the US's "reciprocal tariffs" [1][3] Sector Performance - Manufacturing output grew by 5.0% year-on-year in Q1, a decrease from 7.4% in the previous quarter, with a seasonally adjusted quarter-on-quarter decline of 4.9% [1] - Construction output increased by 4.6% year-on-year, maintaining the previous quarter's growth rate of 4.4%, but saw a seasonally adjusted quarter-on-quarter decline of 2.3% [1] - Wholesale and retail trade, transportation, and warehousing sectors grew by 4.2% year-on-year, down from 5.6% in the previous quarter [2] External Factors - MTI highlighted that the US's imposition of a 10% "baseline tariff" and increased tariffs on countries with significant trade surpluses will negatively impact global trade and economic growth [3] - The decline in external demand is expected to adversely affect Singapore's economy and the ASEAN region, leading to reduced consumer confidence and domestic investment [3][4] Financial Sector Impact - The financial and insurance sectors are anticipated to experience reduced trading activity due to risk-averse sentiment, negatively impacting net fees and commissions from banking and financial services [5] - The uncertain economic environment may suppress corporate capital investment and limit credit intermediation activities [5] Overall Economic Outlook - MTI expects external demand to weaken significantly by the end of the year, particularly affecting export-oriented sectors like manufacturing and wholesale trade [4] - The economic growth forecast for Singapore is expected to slow from 4.4% last year to between 0.0% and 2.0% this year [5]

Global Economic Overview - In Q1 2025, the global economy showed a simultaneous weakening in both supply and demand, with agricultural output growth slowing and service sector sentiment declining [1][4][6] - Consumer spending growth has slowed, private investment remains weak, and government spending is experiencing moderate growth, leading to an increased risk of global inflation rebound [1][4][6] - In Q2 2025, global economic downturn risks are expected to rise, with both demand and supply likely to face pressure [1][4][12] Major Economies Analysis - The US economy is facing weakening growth expectations and rising stagflation risks due to Trump's new policies, while Europe shows signs of recovery driven by fiscal policy, albeit with varying growth trajectories among countries [2][4][12] - Japan's economic outlook has improved, but external demand growth is uncertain; South Korea faces multiple challenges with heightened downside risks [2][4][12] - India's economic growth is rebounding, but potential impacts from tariff policies are concerning; Canada and Mexico are experiencing slowing growth due to tariff impacts [2][4][12] International Financial Markets - Cross-border capital flows remain low, with adjustments in securities investment flows; the currency market is tight, and liquidity varies across regions [2][4][12] - Global debt levels are rising, with policy factors continuing to influence the US and European bond markets; stock market fundamentals remain stable, but policy uncertainties are increasing market volatility [2][4][12] - Commodity prices are experiencing increased volatility, with a sustained upward trend in gold prices [2][4][12] Trade and Tariff Policies - Trump's tariff policies are beginning to impact global trade, with significant tariff increases on imports from China, Canada, and Mexico, leading to varied export performance among major economies [19][20][21] - The potential for a new round of global trade wars is increasing, with affected economies seeking to negotiate trade arrangements and implement countermeasures [19][20][21] - The global trade risk is accumulating as major economies engage in tariff policy battles, with Canada and the EU already announcing retaliatory tariffs against US goods [19][20][21]

Core Viewpoint - The report from the Bank of China Research Institute indicates an increase in global economic downturn risks in Q2 2025, with projected real GDP growth rates of approximately 2.6% for Q2 and 2.4% for the entire year [1] Demand Side Summary - The report highlights that U.S. tariff policies may trigger a chain reaction, leading to rising price levels that pressure global private consumption. Additionally, global investment activities are expected to remain sluggish, with government spending in the U.S. and EU showing divergence. Overall, the demand side is likely to contract in Q2 [1] Supply Side Summary - On the supply side, the global manufacturing recovery is anticipated to face cost shocks, while the service sector may gradually return to long-term trend levels. The report notes that despite good growth prospects for digitalization, automation, and related services, weakened expectations for employment and income growth will reduce spending on leisure and tourism. Thus, the supply side will continue to face pressure in Q2 [1] International Financial Market Summary - In terms of cross-border capital flows, global Foreign Direct Investment (FDI) is expected to maintain low growth in Q2, with adjustments in securities investment flows. For the entire year of 2025, global FDI inflows are projected to remain flat or see slight increases compared to 2024 [1] Foreign Exchange Market Summary - The report anticipates a turning point in major currency trends, with increased volatility in global exchange rates. The U.S. dollar index is expected to fluctuate at high levels, while Asian currencies show overall resilience, and Eastern European currencies may face corrections. The overall volatility in the foreign exchange market is increasing, suggesting caution against rapid reversals in arbitrage trading [2] Bond Market Summary - The report predicts an overall rise in global debt levels in Q2, although the growth rate of debt is expected to slow further. Factors such as reduced supply pressure may lead to downward pressure on U.S. Treasury yields, while fiscal reforms in Germany and spillover effects are likely to increase volatility in the European bond market [2] Stock Market Summary - The global stock market fundamentals are considered relatively stable, but policy uncertainties are expected to increase market volatility. The report indicates that there remains upward momentum in global stock markets in Q2, with non-U.S. markets becoming more attractive. Technology stocks may show divergent trends, while the financial, power, and resource sectors are highlighted as areas of interest [2] Commodity Market Summary - The report forecasts increased volatility in global commodity prices in Q2. It notes that international oil demand growth may lag behind supply, putting continued pressure on oil prices. Gold prices are expected to experience short-term fluctuations but maintain an overall upward trend. Key minerals are anticipated to become a new battleground among nations, reshaping the global supply-demand landscape [2]