Singapore's Q4 GDP Boosts Full-Year Economic Growth to 4.8%, AI Boom Lends Support

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Preliminary data released by the Singapore government on Friday showed the economy grew 5.7% year-on-year in the fourth quarter, lifting the full-year Gross Domestic Product (GDP) growth to its strongest level since 2021, supported by robust manufacturing expansion and the global boom in artificial intelligence (AI)-related products.

The Ministry of Trade and Industry stated that the full-year economic growth rate for 2025 reached 4.8%, significantly higher than its November forecast of "around 4.0%" and the earlier projected range of 1.5% to 2.5%.

A Reuters survey had estimated annual growth of 3.7% for the fourth quarter.

"The growth in the quarter was primarily driven by output expansions in the biomedical manufacturing and electronics clusters," the Ministry said in a news release, adding that "sustained demand for AI-related semiconductors, servers, and server-related products" propelled the expansion in the tech sector.

OCBC Bank economist Selena Ling described 2025 as an "amazing year" for Singapore. The country's economic growth rate for 2024 was 4.4%.

"This stellar outcome represents a significant upward revision from earlier forecasts anticipating a growth slowdown, reflecting the resilience of the global economy and export demand, some front-loading ahead of peer tariff pressures, and broad-based gains across key sectors," Ling said.

According to the Ministry's preliminary estimates, GDP grew 1.9% quarter-on-quarter on a seasonally adjusted basis.

In a New Year's address on Wednesday, Prime Minister Lawrence Wong said that although full-year 2025 growth was stronger than expected, maintaining this pace this year would be challenging. Wong attributed the 2025 growth to US tariffs being imposed later and at lower levels than anticipated, coupled with a surge in demand for AI-related semiconductors and electronic products.

The data released on Friday did not include forecasts for 2026. The Ministry of Trade and Industry had previously projected 2026 economic growth to be between 1.0% and 3.0%. OCBC's Ling forecasts 2026 GDP to grow 2% year-on-year.

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