Economic Outlook - Singapore's Ministry of Trade and Industry has revised its GDP growth forecast for 2025 from 0.0%-2.0% to 1.5%-2.5% based on stronger-than-expected performance in the first half of the year [1][2] - The economy grew by 4.4% year-on-year in Q2, slightly up from 4.1% in Q1, with a seasonally adjusted quarter-on-quarter growth of 1.4%, reversing a contraction of 0.5% in Q1 [1] Sector Performance - Growth was primarily driven by outward-oriented sectors such as wholesale trade, manufacturing, financial services, and transportation and warehousing, which engaged in preemptive trade activities in response to impending U.S. tariffs [1][2] - However, the local food and beverage sector experienced a contraction due to increased outbound tourism [1] Future Challenges - The report warns of potential economic slowdown in the second half of 2025, particularly for outward-oriented industries facing weakened demand [3] - The anticipated impact of U.S. tariffs on global end-market demand may lead to reduced growth in the manufacturing sector, although sectors like aerospace engineering and precision engineering may continue to see growth due to ongoing maintenance and refurbishment work [3] - The Ministry will closely monitor global and domestic economic developments and adjust growth forecasts as necessary [3]

Core Insights - Singapore's manufacturing output in June increased by 8% year-on-year, marking the 12th consecutive month of growth and significantly higher than the 3.6% increase in May [1] - Excluding the biomedical manufacturing sector, the output grew by 8.2% year-on-year [1] Manufacturing Sector Performance - Precision engineering saw the highest growth in June, with a year-on-year increase of 18.9%, driven by a 19.3% rise in machinery and systems [1] - The overall output of the precision engineering sector grew by 5.7% in the first half of the year [1] - Biomedical manufacturing experienced an 11.3% year-on-year growth, with the pharmaceutical industry surging by 38.8% due to a low comparison base from the previous year, while the medical technology sector declined by 2.5% [1] - The biomedical manufacturing sector's output grew by 3.0% in the first half of the year [1] Transportation Engineering and Other Sectors - Transportation engineering output increased by 9.2%, with the aerospace sector continuing its upward trend at 20.6%, although the growth rate slowed compared to May [1] - Overall, transportation engineering grew by 16.4% in the first half of the year [1] - The electronics and chemicals sectors reported year-on-year increases of 6.6% and 1.1%, respectively, with the electronics sector's output growing by 7.8% in the first half of the year [1] - The chemicals sector experienced a decline of 1.9% [1] Decline in General Manufacturing - General manufacturing was the only sector to report a decline in June, contracting by 11.6% year-on-year, with only printing output increasing by 2.5% while all other areas saw decreases [1]

Economic Growth - Singapore's economy grew by 3.9% year-on-year in Q1, showing resilience despite global challenges [1] - The manufacturing sector, a key pillar of the economy, grew by 4.0% year-on-year, driven by strong performance in electronics, precision engineering, and transport engineering [1] Wholesale Trade - The wholesale trade sector experienced a 4.2% year-on-year growth, with machinery and equipment being the main growth drivers [2] - The sector benefited from a "rush" phenomenon due to U.S. tariff policies, which led to increased shipments before tariffs took effect [2] Financial and Insurance Sector - The financial and insurance sector grew by 4.5% year-on-year, supported by strong performance in banking and payment services [2] - Singapore's stable and open financial market attracted significant international investment [2] Construction Sector - The construction sector showed robust growth of 5.5% year-on-year, driven by both public and private construction activities [2] - Increased government investment in infrastructure and ongoing private projects contributed to this growth [2] Retail Trade and Consumer Confidence - Retail trade saw a slight increase of 0.1% year-on-year, indicating overall stability in the consumer market [3] - Consumer confidence and employment stability led to increased household spending, supported by government initiatives [3] Services Sector - The services sector grew by 3.6% year-on-year, with information and communication, finance and insurance, and professional services being the main contributors [3] - The acceleration of global digital transformation boosted demand for information and communication technology [3] Labor Market - The unemployment rate remained low at 2.1%, enhancing consumer spending capacity and providing a reliable workforce for businesses [4] - Government initiatives in technology innovation and digital transformation have positively impacted the information and communication sector [4] Policy and Economic Outlook - The government is implementing various policies to stabilize the economy and employment, including infrastructure investment and support for SMEs [4] - Despite strong performance, Singapore must remain vigilant against global economic uncertainties, including trade protectionism and geopolitical risks [4]