Economic Indicators and Singapore's GDP, FDI, and Trade Trends

Singapore’s economy expanded by 4.4 percent in 2024, accelerating sharply from 2023’s 1.8 percent growth. This outperformed initial government forecasts of 3.5 percent, driven by a rebound in manufacturing and trade-oriented services. The fourth quarter of 2024 saw year-on-year growth of 5.0 percent, though momentum slowed to a quarterly pace of 0.5 percent (seasonally adjusted). By early 2025, growth moderated further, with Q1 GDP expanding 3.8 percent year-on-year and contracting 0.8 percent quarter-on-quarter.

The Ministry of Trade and Industry (MTI) downgraded its 2025 GDP forecast range from 1–3 percent to 0–2 percent, citing weakening external demand and escalating U.S.-China trade tensions. This adjustment reflects Singapore’s vulnerability to global supply chain disruptions, given its status as a trade-dependent economy.

Structural economic composition

The services sector maintained its dominance, contributing 70 percent of GDP, while manufacturing remained the largest single industry at 21.5 percent. Manufacturing output grew 4.3 percent in 2024, reversing 2023’s 4.2 percent contraction, led by electronics (+7.4 percent) and transport engineering clusters. However, biomedical manufacturing declined, highlighting sectoral divergences.

Foreign direct investment (FDI) into Singapore reached a record US$192 billion in 2024, marking a 5.6 percent increase from the previous year. This growth was driven largely by equity capital and retained earnings, reflecting Singapore’s continued appeal as a global investment hub. The finance and insurance sector accounted for over 60 percent of total FDI, underscoring the city-state’s prominence as a leading financial center in Asia. Other key sectors attracting investment included professional services, manufacturing, wholesale and retail trade, and information and communications technology.

Geographically, the majority of FDI originated from the United States, United Kingdom, Japan, Mainland China, and Ireland, together contributing more than half of the total inflows. Asian investors made up about 52 percent, emphasizing Singapore’s role as a gateway to Southeast Asia’s growing markets. The government has prioritized attracting high-value, technology-driven investments, with significant projects in advanced manufacturing—such as semiconductors, biomedical technologies, and green energy—supporting Singapore’s vision to lead in sustainable and innovative industries.

While overall FDI and job creation remained strong, some moderation in business expenditure and hiring was observed amid global uncertainties and higher interest rates. Nevertheless, Singapore’s diversified economy, strategic policies, and robust investor confidence position it well for continued growth. The Economic Development Board projects FDI inflows could exceed US$200 billion by 2028, driven by ongoing investments in technology, sustainability, and innovation sectors.

Merchandise trade continued its recovery in 2025, expanding by 5.4 percent year-on-year in June and reaching S$326.7 billion in Q1 2025. This follows a robust rebound in 2024, where total trade grew by 6.6 percent to S$1.3 trillion (US$962 billion) after an 11.7 percent contraction in 2023. Non-oil domestic exports (NODX) rose 3.3 percent in Q1 2025, a reversal from the prior quarter's 2.4 percent growth.

Re-exports remained a key growth driver, climbing 7.8 percent year-on-year, reinforcing Singapore’s strategic role as a regional transshipment hub. Services trade also maintained its momentum with an 8.6 percent increase in 2024, buoyed by strong financial and transport services performance.

The outlook for the remainder of 2025 remains cautious. NODX is projected to grow between 1 to 3 percent, hinging on a sustained rebound in global electronics demand. However, the Ministry of Trade and Industry (MTI) has flagged potential risks, particularly from escalating U.S. tariffs, which could dent Singapore’s export competitiveness—especially in electronics and machinery.

Still, industrial production rose sharply by 8.0 percent year-on-year in June 2025, reflecting underlying resilience in key manufacturing sectors, while consumer price inflation remained muted at 0.8 percent.