Singapore’s GDP Jumps a ‘Stunning’ 4.8% in 2025, Powered by AI-Led Manufacturing Boom

Singapore’s economy expanded by a stronger-than-expected 4.8% in 2025, marking its fastest growth since 2021, according to preliminary data released by the Ministry of Trade and Industry on Friday.

The upbeat annual performance was underpinned by a 5.7% year-on-year expansion in the fourth quarter, well above market expectations. Economists surveyed by Reuters had forecast Q4 growth of 3.7%. The full-year result also exceeded the trade ministry’s November projection of “around 4.0%” and sharply outperformed its earlier growth range of 1.5% to 2.5%.

The ministry said growth momentum was driven primarily by biomedical manufacturing and electronics, with the technology sector benefiting from sustained global demand for AI-related semiconductors, servers, and server-linked products. The artificial intelligence boom has significantly boosted Singapore’s high-value manufacturing output and exports.

Economist Selena Ling of OCBC described 2025 as a “stunning year” for the city-state, following 4.4% growth in 2024. She said the strong performance reflected a resilient global economy, firm export demand, some front-loading ahead of tariff pressures, and broad-based gains across key sectors.

Despite the strong showing, risks remain. Singapore’s exports to the United States are subject to a 10% tariff, lower than those imposed on several Southeast Asian peers. However, sector-specific levies — including a 100% tariff on branded pharmaceuticals — continue to pose challenges.

Singapore’s central bank has warned that broader sectoral tariffs could weigh on demand for exports such as semiconductors, consumer electronics and pharmaceutical products, which together account for around 40% of Singapore’s exports to the US. While the AI-driven manufacturing boom has strengthened near-term growth, policymakers remain cautious about external trade risks going forward.