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Political risk  - Commercial risk  - Financing risk  Last updated in **July 2025.** | | | |---|---| | GDP | USD 547.4bn (World ranking 25, World Bank 2024) | | Population | 6\.0mn (World ranking 113, World Bank 2024) | Swipe to view more | | | |---|---| | Form of state | Parliamentary Republic | | Head of government | Lawrence Wong (PM) | | Next elections | 2030, general election | ## Strengths & Weaknesses  - Favorable business environment - Strong public and external finances - Disciplined fiscal and monetary policies - Stable political environment - Strategic geographic position  - Vulnerable to external challenges - Medium term challenges including social inequality and job-skill mismatches - Limited renewable energy potential - High dependence on exports ## Economic Overview  ### The trade war is creating significant headwinds to growth Singapore has a remarkable track record of economic growth, with an annual average rate of +5.4% in the 2000s and +5% in the 2010s. The economy was severely hit by the Covid-19 crisis, with growth contracting by -3.8% in 2020, followed by a strong rebound of +9.8% in 2021 and moderating to +4.1% in 2022. Softening external demand amid high inflation and a downturn in the electronics cycle then led to a slowdown to +1.8% in 2023. Growth then improved in 2024 (+4.4%), thanks to a rebound in global demand and domestic private consumption. Going forward, we forecast growth to settle at +1.6% in 2025 and +1.8% in 2026 in the context of global trade being hit by more protectionist US trade policies. This will affect Singapore’s exports and trade-related services, with a reverberating impact on domestic consumption and investment. In the medium term, and beyond the initial shock from the US trade war, risks to Singapore’s economic growth are tilted to the downside, including a global economic slowdown, supply-chain disruptions and rising geopolitical tensions. In the longer term, risks from climate change may weigh on economic prospects. Fiscal policy in Singapore was supportive during the Covid-19 crisis and pushed the fiscal balance into a deficit of -6.7% of GDP in 2020 – a significant deviation from the pre-pandemic average of +5% of GDP surplus. The economic recovery and the rollback of broad-based supportive measures have brought the fiscal balance back into positive territory since, with a surplus of +1.1% of GDP in 2021, +1.2% in 2022, +3.5% in 2023 and +4.5% in 2024. We expect the fiscal balance to stabilize at around 3% in 2025 and 2026, while targeted policies will continue to be rolled out, such as measures for the labor market or support for technology sectors. Medium- and long-term challenges such as an ageing population, risks from climate change and the need to maintain its competitiveness among rising competition from regional peers will constrain the surplus from increasing further. In terms of prices, after reaching highs in 2022-2023, headline inflation is likely to ease: we expect 0.9% in 2025 and 1.2% in 2026 (below the pre-pandemic average of +1.7% across 2010-2019). Inflation will remain subdued in the context of low commodity prices, a strong Singapore dollar and soft domestic demand. During the monetary policy tightening cycle across 2021-2023, the Monetary Authority of Singapore (MAS) increased the slope of the S\$NEER policy band four times and took up the center three times. This policy stance has been helpful in dampening inflation, with inflation expectations remaining well-anchored. The MAS policy stance pivoted in 2025, reducing the slope of the S\$NEER policy band twice in the first half of the year. Further easing action is likely this year.  ### Rock-solid macro fundamentals outshine structural vulnerabilities Short-term financing risk in Singapore remains low on the back of strong macro-fundamentals – both in terms of public and external finances. It remains one of the few countries with the top credit rating of AAA from leading credit agencies. We forecast public debt to remain elevated in 2025 and 2026 at around 175% of GDP. However, this should not be a cause for concern as it is entirely domestic and is issued to meet specific long-term objectives. Moreover, the economy is a net external creditor. On the back of favorable trade policies and infrastructure, Singapore continues to solidify its strength as a globally renowned entrepot. In terms of external balances, the economy has run a current account surplus for decades, with an annual average of +18% of GDP during the 2010s, and as a consequence, has accumulated ample foreign exchange reserves. The solid current account balance reflects a surplus in trade in goods and services, partly offset by a deficit in the income account, on the back of the repatriation of profits by foreign firms and interest payments on external debt. The current account balance is likely to stay around +17% of GDP in 2025 and 2026. Vulnerabilities mainly arise from the economy’s dependence on its external sector, making it exposed to challenges that are sometimes beyond Singapore’s control.  ### Corporate-friendly business framework, with low risks to political stability Singapore offers a prime business environment for corporations, thanks to its liberal landscape in terms of trade and investments, transparent political system, favorable tax policies, solid infrastructure and a strong workforce. The World Bank Institute’s annual Worldwide Governance indicators suggest that the regulatory and legal frameworks are business-friendly, and the level of corruption is low. On broadly similar lines, the Heritage Foundation’s annual Index of Economic Freedom Survey 2024 ranks Singapore 2nd out of 185 countries, reflecting strengths in areas such as trade freedom, property rights, government integrity, tax burden, government spending, business freedom, investment freedom, monetary freedom and financial freedom. However, Singapore scores less favorably with regard to environmental sustainability, owing to a very low level of renewable electricity output and a high level of water stress. Overall, Singapore ranks 105 out of 210 economies based on our 2025 proprietary Environmental Sustainability Index. The political landscape in Singapore remains stable, transparent and efficient. The new prime minister, Lawrence Wong, succeeded Lee Hsien Looing in May 2024 (both are from the People’s Action Party, PAP) and saw his mandate strengthened by the PAP victory in the May 2025 general election. He will continue to address medium- and long-term challenges such as social inequality, immigration, job-skill mismatches and the perception of an inadequate social safety net. Vulnerabilities in the political landscape arise from Singapore’s ethnic diversity, but escalated racial tensions are not likely due to constraints on press freedom and public demonstrations. ## Trade Structure by destination/origin (% of total, 2023) | | | | | | |---|---|---|---|---| | | **Exports** | Rank | **Imports** | | | China 14.0% |  | **1** |  | Taiwan 13.8% | | Hong Kong 11.0% |  | **2** |  | China 12.3% | | Malaysia 10.4% |  | **3** |  | United States 12.2% | | United States 8.7% |  | **4** |  | Malaysia 11.2% | | Indonesia 7.9% |  | **5** |  | Korea, Republic of 6.3% | ## Trade Structure by product (% of total, annual 2023) | | | | |---|---|---| | **Exports** | Rank | **Imports** | | Electrical machinery, apparatus and appliances, n.e.s. 28\.7% | **1** | 27\.5% Electrical machinery, apparatus and appliances, n.e.s. | | Petroleum, petroleum products and related materials 14\.2% | **2** | 17\.6% Petroleum, petroleum products and related materials | | Specialised machinery 6\.3% | **3** | 4\.6% Gold, non-monetary (excluding gold ores and concentrates) | | Organic chemicals 4\.2% | **4** | 4\.4% Power generating machinery and equipment | | Professional and scientific instruments, n.e.s. 4\.1% | **5** | 3\.8% Office machines and automatic data processing machines | *** ## Trade structure by destination/origin (% of total, 2022) | Exports | Rank | Imports | |---|---|---| | China, Hong Kong SAR 14\.4%  | 1 |  15\.1% China | | China 13\.7%  | 2 |  12\.2% Malaysia | | United States of America 9\.7%  | 3 |  10\.4% China, Taiwan Province of | | Malaysia 8\.5%  | 4 |  10\.1% United States | | Indonesia 5\.7%  | 5 |  5\.6% Japan | ## Trade structure by product (% of total, 2022) | Exports | Rank | Imports | |---|---|---| | Electrical machinery and apparatus 27\.1% | 1 | 22\.9% Electrical machinery and apparatus | | Petroleum and related materials 17\.6% | 2 | 21\.2% Petroleum and related materials | | Organic chemicals 5\.2% | 3 | 4\.7% Office machines and automatic data processing machines | | Specialised machinery 5\.0% | 4 | 4\.3% Gas, natural and manufactured | | Office machines and automatic data processing machines 4\.3% | 5 | 3\.8% Gold, non-monetary (excluding gold ores and concentrates) | *** ### Contacts  Françoise Huang Senior Economist for Asia Pacific [Send an email](mailto:francoise.huang@allianz-trade.com) Allianz Trade - [Olympic Partnership](https://www.allianz-trade.com/en_US/about-usa/allianz-trade-sponsor-of-the-olympic-and-paralympic-movements.html) - [About Allianz Trade US](https://www.allianz-trade.com/en_US/about-usa.html) - [Careers](https://www.allianz-trade.com/en_US/about-usa/careers.html) Our Solutions - [Trade Credit Insurance](https://www.allianz-trade.com/en_US/what-is-trade-credit-insurance.html) - [Surety Bonds](https://www.allianz-trade.com/en_US/surety-bonds.html) - [Specialty Solutions](https://www.allianz-trade.com/en_US/specialty-solutions.html) Our Publications - [Resources](https://www.allianz-trade.com/en_US/resources.html) - [Media Center](https://www.allianz-trade.com/en_US/about-usa/media-coverage.html) - [Blog](https://www.allianz-trade.com/en_US/insights.html) Support - [Contact Us](https://www.allianz-trade.com/en_US/contact-us.html) - [FAQs](https://www.allianz-trade.com/en_US/resources/faq.html) - [Customer Resource Center](https://www.allianz-trade.com/en_US/resources/customer-resource-center.html) ### Follow us *** - [Privacy Notice](https://www.allianz-trade.com/en_US/privacy-notice.html) - [Legal Information](https://www.allianz-trade.com/en_US/legal.html#Legal%20Information) - [Code of Conduct](https://www.allianz-trade.com/content/dam/onemarketing/aztrade/allianz-trade_com/en_gl/legal/code-of-conduct-allianztrade-eng-external.pdf) - [Compliance](https://www.allianz-trade.com/en_US/compliance-at-allianz-trade.html) Euler Hermes North America Insurance Company and its affiliated debt collection company are part of the Allianz group and market their products and services using the ‘Allianz Trade’ trademark. 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Singapore has a remarkable track record of economic growth, with an annual average rate of +5.4% in the 2000s and +5% in the 2010s. The economy was severely hit by the Covid-19 crisis, with growth contracting by -3.8% in 2020, followed by a strong rebound of +9.8% in 2021 and moderating to +4.1% in 2022. Softening external demand amid high inflation and a downturn in the electronics cycle then led to a slowdown to +1.8% in 2023. Growth then improved in 2024 (+4.4%), thanks to a rebound in global demand and domestic private consumption. Going forward, we forecast growth to settle at +1.6% in 2025 and +1.8% in 2026 in the context of global trade being hit by more protectionist US trade policies. This will affect Singapore’s exports and trade-related services, with a reverberating impact on domestic consumption and investment. In the medium term, and beyond the initial shock from the US trade war, risks to Singapore’s economic growth are tilted to the downside, including a global economic slowdown, supply-chain disruptions and rising geopolitical tensions. In the longer term, risks from climate change may weigh on economic prospects. Fiscal policy in Singapore was supportive during the Covid-19 crisis and pushed the fiscal balance into a deficit of -6.7% of GDP in 2020 – a significant deviation from the pre-pandemic average of +5% of GDP surplus. The economic recovery and the rollback of broad-based supportive measures have brought the fiscal balance back into positive territory since, with a surplus of +1.1% of GDP in 2021, +1.2% in 2022, +3.5% in 2023 and +4.5% in 2024. We expect the fiscal balance to stabilize at around 3% in 2025 and 2026, while targeted policies will continue to be rolled out, such as measures for the labor market or support for technology sectors. Medium- and long-term challenges such as an ageing population, risks from climate change and the need to maintain its competitiveness among rising competition from regional peers will constrain the surplus from increasing further. In terms of prices, after reaching highs in 2022-2023, headline inflation is likely to ease: we expect 0.9% in 2025 and 1.2% in 2026 (below the pre-pandemic average of +1.7% across 2010-2019). Inflation will remain subdued in the context of low commodity prices, a strong Singapore dollar and soft domestic demand. During the monetary policy tightening cycle across 2021-2023, the Monetary Authority of Singapore (MAS) increased the slope of the S\$NEER policy band four times and took up the center three times. This policy stance has been helpful in dampening inflation, with inflation expectations remaining well-anchored. The MAS policy stance pivoted in 2025, reducing the slope of the S\$NEER policy band twice in the first half of the year. Further easing action is likely this year.