WHAT YOU NEED TO KNOW
  • Fresh from a landslide victory in his first election as leader of the People’s Action Party (PAP), Prime Minister Lawrence Wong will now focus on assembling a strong Cabinet to navigate Singapore through economic headwinds. Wong is expected to continue to prioritize political and economic stability while advancing leadership renewal to ensure long-term resilience.
  • Singapore’s economic growth outlook for 2025 remains subdued, weighed down by escalating tariffs. To mitigate pressures on key export-driven sectors, Singapore will seek to intensify efforts to deepen international economic partnerships, diversify market access and strengthen supply chain resilience.
  • Investment in Singapore will likely stay robust, underpinned by the country’s strong rule of law, strategic location and role as a regional hub. To sustain investor confidence, Singapore must demonstrate clear, measurable outcomes from innovation and capital deployment, moving beyond capacity expansion to delivering a tangible commercial impact.
ON THE HORIZON
  • The Ministry of Digital Development and Information is expected to table the Digital Infrastructure Act in the second half of the year. Originally scheduled in the first half, the delay stems from the need to align with the government’s legislative calendar. The bill is intended to strengthen the security and resilience of digital infrastructure and service providers.
  • The Online Safety (Relief and Accountability) Bill — aimed at enhancing protection for victims of online harm, along with the establishment of an Online Safety Commission — is set to be introduced this year after being announced during this year’s Committee of Supply debates.
  • The Ministry of Manpower plans to introduce a second bill in the second half of the year to address private employment claims related to workplace discrimination. This will complement the Workplace Fairness Bill, passed in January, which establishes worker protections, dispute resolution processes and enforcement measures.
  • Singapore will explore ways to strengthen its equity markets. Efforts are underway to improve the listing environment through enhanced incentives and a more streamlined initial public offering process, aimed at making the market more accessible and efficient for prospective issuers.

Singapore Market Overview and Forecast


Political Climate
Unexpected Landslide Victory Delivers Clear Mandate for the Ruling PAP

The PAP returned to power in a landslide victory May 3 with 65.6 percent of the national vote, improving on its 2020 performance by more than 4 percent. The party won 87 of the 97 seats up for grabs, fending off a strong challenger from the main opposition Workers’ Party (WP), without ceding any new ground. Like recent elections in Canada and Australia, Singaporeans voted for political stability and economic safety, delivering the clear and strong mandate that Prime Minister Wong requested in his inaugural elections as the PAP’s secretary-general and leader of the fourth-generation team.

The WP had a strong performance and retained and further entrenched its position in its existing seats. Its involvement in the two closest contests of the night also means that its secretary-general, Pritam Singh, continues to be the leader of the opposition, and the WP will take over Parliament’s two non-constituency seats, marking the WP’s largest overall parliamentary presence in its history. These results point to an increasingly selective electorate that values the quality of the opposition and is not satisfied with an opposition that merely checks the PAP. This could potentially lead to a two-party system as the way forward in the years to come.

Given the clear signal of trust, stability and confidence in the PAP-led government, companies can expect to see continuity in Singapore’s economic policy, including continued support for digital transformation, sustainability goals and manpower policies aligned with Wong’s Forward Singapore road map. In the near term, companies will continue to have a predictable regulatory environment in Singapore that will aid in their planning and operational stability amid external uncertainties. This is reflected in the makeup of Wong’s Cabinet: aside from appointing three coordinating ministers to support Wong and his deputy Gan Kim Yong, there were minimal changes, with most ministers retaining their portfolios.

Macroeconomic Climate
Singapore’s Growth Under Pressure Amid Rising Trade Tensions

Singapore’s economy faces mounting challenges from escalating global trade tensions and uncertainty around tariffs. As a highly trade-reliant economy deeply embedded in global supply chains, Singapore is extremely vulnerable to both higher costs and the broader slowdown in regional economies and key trading partners. As such, Singapore’s GDP growth is forecast to range between 0-2 percent this year. A technical recession cannot be ruled out if global economic conditions further deteriorate.

Export-oriented sectors like manufacturing, particularly for semiconductors and pharmaceuticals, will likely weaken, especially if U.S. tariffs under Section 232 of the Trade Expansion Act are implemented. However, the digital sector is expected to remain resilient, bolstered by sustained global demand for digital solutions and information technology services as well as Singapore’s continued push to expand its network of digital economy agreements. Tourism is also expected to remain a key growth driver, aided by continued recovery in international travel and enhanced domestic offerings, including a new oceanarium, expanded cruise options and a revitalized leisure district as part of Singapore’s 2040 tourism development road map.

With the external outlook weakening, the Monetary Authority of Singapore expects a negative domestic output gap. Inflation is projected to remain between 0.5-1.5 percent for the year. In response, the central bank has eased its monetary policy stance and, if necessary, could further ease monetary policy to curb the appreciation of the Singapore dollar, preserve export competitiveness and mitigate the inflationary impact of tariffs on imported goods. A more accommodative policy environment, characterized by maintaining low interest rates, could help support domestic demand and foster a more stable operating climate for businesses navigating prolonged global uncertainty.

Investment Environment
Strengthening Portfolios Through Singapore’s Global Links and Value-Added Sectors

Singapore attracted SGD 13.5 billion (US$10 billion) in fixed asset investment commitments in 2024, a 6.3 percent increase from the previous year, with electronics accounting for more than half of the inflows. Despite the uptick, the projected value-added contribution per year fell to SGD 23.5 billion ($17.4 billion) from SGD 26.7 billion ($19.7 billion) in 2023, reflecting a more cautious global investment environment. Although Singapore’s fundamentals, such as political stability, rule of law and strategic location, remain attractive, persistent inflation, high interest rates and slower global growth continue to weigh on returns. Other factors include macroeconomic volatility, cybersecurity risks and shifting geopolitical dynamics.

Singapore continues to diversify market access and strengthen supply chain resilience by deepening its international economic partnerships. Agreements such as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership; Singapore’s partnerships with the Association of Southeast Asian Nations, the Gulf Cooperation Council and the European Union; and initiatives like the Johor-Singapore Special Economic Zone provide strategic buffers against global fragmentation.

Singapore is also recalibrating its innovation agenda to meet evolving investor expectations. While artificial intelligence remains a national priority, with SGD 150 million ($112 million) committed under the Enterprise Compute Initiative to drive business adoption, investors increasingly expect tangible outcomes that boost productivity, revenue and profitability. Similarly, the SGD 1 billion ($750 million) investment in upgrading research and development infrastructure aims to accelerate the commercialization in biosciences, medtech and semiconductors, rather than merely expanding capacity. The long-awaited Digital Infrastructure Act, expected in the second half of the year, will enhance the security and reliability of critical digital infrastructure.

Private equity flows in 2024 reflect the shifts in Singapore’s investment climate. Singapore attracted SGD 10 billion ($7.6 billion) in private capital last year, nearly half of Southeast Asia’s total, reinforcing its role as a regional capital hub. Investment is increasingly concentrated in areas where Singapore offers a competitive edge, such as digital infrastructure, advanced manufacturing and green technologies. In a more volatile global environment, investors are demanding not only stability but clear, outcome-driven innovation. Efficiency, resilience and commercial impact will define Singapore’s path to sustained competitiveness going forward.

We will continue to keep you updated on developments in Singapore as they occur. If you have any comments or questions, please contact BGA Singapore Managing Director Nydia Ngiow at nngiow@bowergroupasia.com.

Best regards,

BGA Singapore Team

A small ginko leaf

Managing Director, Global Trade and Economics

Nydia brings over a decade of experience working at the forefront of international affairs and international trade issues in the Asia-Pacific, with the majority of her career prior to BGA spent working for the Singapore government. Nydia most recently managed the China Program at the American National Standards Institute (ANSI) in Washington, D.C., where she brought together technical, business and policy leaders to find solutions to issues affecting U.S.-China trading relations to strengthen U.S. market access in China. She provided member organizations with coverage of policy and reform issues, and furthered ANSI’s relationships with counterpart organizations in China. Positioned in ... Read More