INSEAD and Portulans Institute’s 2025 Global Talent Competitiveness Index ranks Singapore at the top.
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Singapore’s economy expanded 5.7% year-on-year in the fourth quarter, the strongest level since 2021, mainly due to a sharp increase in manufacturing output in the three months to December.
According to the Ministry of Trade and Industry, Singapore’s manufacturing sector expanded by 15%, compared to 4.9% growth in the third quarter.
The ministry said growth in the quarter was primarily driven by biopharmaceutical manufacturing and the electronics cluster.
Manufacturing accounts for approximately 20% of the city-state’s GDP.
Most other sectors, such as construction and services, contracted during the quarter.
As announced by Prime Minister Lawrence Wong in his New Year’s address, the advance forecast has lifted full-year GDP growth to 4.8%, above last quarter’s revised 4.3% growth.
The 4.8% growth rate exceeded the “approximately 4%” forecast revised upward by the country’s Ministry of Trade and Industry in November.
“Given the circumstances, this is a better result than expected,” Wong said, warning that it will be difficult to maintain the current pace of growth.
Singapore’s MTI had predicted GDP growth rate of around 1-3% in 2026.
Serena Lin, OCBC’s chief economist and group head of research and strategy, said Singapore’s GDP performance “demonstrates the economy’s resilience through its broad and diverse strengths in manufacturing, services and construction.”
Lin projected GDP growth in 2026 to be around 2%, assuming that a high base in 2025 would slow manufacturing growth to around 2.2% year-on-year.
Singapore had previously warned that 2025 would be a tough year due to trade risks after US President Donald Trump’s administration imposed trade tariffs on dozens of countries on Liberation Day in April.
Despite having a free trade agreement with the US since 2004, Singapore was hit with a 10% basic tariff. “These are not acts you would do to a friend,” Wong said at the time.
According to World Bank data, Singapore is highly dependent on trade, with a trade-to-GDP ratio of over 320% in 2024.
In April last year, the country warned of the possibility of zero growth and implemented monetary easing twice in 2025 in preparation for an economic slowdown.
