UOB Global Economics and Markets Research raised its 2024 growth forecast for Singapore to 3.5%, driven by strong growth in trade-related sectors during Q3.

However, it lowered the 2025 growth forecast to 2.5% from the previous 2.9% due to external risks like geopolitical tensions and a potential slowdown in the electronics sector.

The 2024 forecast matches the Ministry of Trade and Industry's (MTI) estimate of around 3.5%, whilst the 2025 forecast falls within MTI's 1%-3% range.

UOB cited several factors for its 2025 forecast, including the timing and impact of potential U.S. tariffs under Trump, geopolitical tensions, a possible slowdown in the electronics cycle, and the pace at which central banks ease interest rates.

However, falling interest rates could help mitigate some of the slowdown by encouraging more business and consumer loans whilst boosting trading activity.

Meanwhile, activity in tourism-related sectors is expected to slow as the boost from post-pandemic pent-up demand fades.