S’pore economy grew 4.8% in 2025, strategy must be refreshed to stay competitive: PM Wong

SINGAPORE – Singapore posted stronger-than-expected economic growth of 4.8 per cent in 2025 amid a changing global order and deepening geopolitical tensions.

But Singaporeans must be realistic and know that sustaining this pace of growth will be challenging, Prime Minister Lawrence Wong said on Dec 31 as he unveiled the latest figure in his New Year message.

To remain competitive, PM Wong said Singapore cannot simply do more of the same and must “rethink, reset and refresh” its economic strategies.

On this front, he noted that the first set of proposals from the Economic Strategy Review will be released soon, and the Government will respond to them at Budget 2026. Deputy Prime Minister Gan Kim Yong heads the task force that the review – overseen by a team of younger office-holders – comes under.

PM Wong, who is also Finance Minister, will deliver the Budget 2026 speech in Parliament

on Feb 12,

when he is expected to address concerns such as job security and cost of living.

Explaining

the stronger-than-expected growth,

PM Wong said Singapore had benefited from an artificial intelligence-related surge in demand for semiconductors and electronics.

Global economic growth also turned out to be more resilient than anticipated, and the tariffs imposed by the US kicked in later and at lower levels than many had feared.

These factors led to unemployment and inflation remaining low and real incomes rising across the board, PM Wong said.

Going forward, fractured trade and geopolitical tensions are not transient problems, but permanent features of a fragmented world.

In 2025, countries reconfigured trade networks and supply chains in the name of resilience and security, while

geopolitical tensions deepened,

PM Wong noted, citing the ongoing war in Ukraine, the precarious situation in Gaza, and clashes between Thailand and Cambodia over disputed border areas.

Reflecting on the past year, he said it was a significant one as the nation commemorated 60 years of independence. Singaporeans also entrusted a new government with a clear mandate to lead the country in a changed world, following a general election.

“We will face more obstacles to growth, and inflationary pressures may intensify. As a small and open economy, Singapore cannot fully shield ourselves from these headwinds,” he said.

While there will be more challenges and unknowns, Singapore can press on confidently as it is dealing with them from a position of strength, he added.

The Republic’s international standing is high, and its brand is trusted and respected. Amid global uncertainties, many companies – including major players like Microsoft and promising start-ups – are seeking stability and turning to Singapore as a trusted base or a launch pad to the region, he noted.

PM Wong said that during his overseas visits, he saw how Singapore’s reputation opens doors and creates opportunities for its businesses and people, with local firms carving out new niches and making their mark in places like Africa and Latin America.

He said the Government will continue to support local companies as they expand, scale up and seize overseas opportunities.

While Singapore looks outward for new opportunities, PM Wong said the focus remains firmly on improving lives here at home.

“Economic success is a means to an end. What matters is that every Singaporean benefits from the nation’s progress,” he said.

PM Wong said that alongside the labour movement and employers, the Government will help every worker grow and progress in their careers, so they can see tangible gains for themselves and their families.

Beyond jobs, it will continue improving the basics in life – education, housing and healthcare – so that every Singaporean has security and peace of mind.

He said the Government will uplift lower-income families through financial assistance and empower them to build a better future for themselves and their children, and also enhance support for people with disabilities and their caregivers.

Even as the Government tackles these areas, it also has to confront longer-term challenges such as the country’s rapidly ageing population and declining birth rates, said PM Wong.

He said it will continue to support young Singaporeans who want to marry, settle down and have children, by addressing their concerns like housing, childcare and education.

“We will create an environment where families can grow and thrive, and society remains vibrant and forward-looking.

“This also means staying open, and welcoming those who embrace our way of life as our fellow citizens,” he said.

Singapore is also studying holistically the far-reaching implications of longer lifespans on healthcare, work and retirement, said PM Wong.

A Tripartite Workgroup on Senior Employment is reviewing strategies to enable seniors to work meaningfully in age-friendly workplaces, he noted.

This goes with efforts to strengthen retirement adequacy, especially for lower- and middle-income workers who need more support.

Another long-term issue he highlighted was that of clean energy – “our new frontier and next major challenge”.

Singapore will secure a reliable supply of clean energy to power the energy-intensive industries of the future, including artificial intelligence, with one strategy being to import green energy via the ASEAN power grid that has been a long-term project, he said.

The Republic is also pursuing its own clean solutions in parallel, including possible options like low-carbon hydrogen and nuclear energy, he added.

With complex challenges ahead, Singapore must be bold, creative and open to new solutions, PM Wong said. While there will be many discussions and robust debates, the nation must not allow differences to divide it.

“Instead, we must harness our diverse perspectives to chart a new path forward – as one united people.”

Singapore’s success was nothing short of a miracle, shaped by the courage and grit of all its people, he added, bringing up

the newly declassified Albatross File documents

that showed how close the country was to a different fate.

The exhibition featuring the documents,

launched in December,

showed the “agonising choices that confronted our founding leaders and how often Singapore’s future hung by a thread”, PM Wong said.

In a separate Facebook post, Senior Minister Lee Hsien Loong said the Republic has much to give thanks for as 2025 draws to a close, from stronger-than-expected economic outlook to the outstanding SEA Games performance by Team Singapore athletes.

At the same time, he added, PM Wong’s New Year message is a reminder that many tasks still lie ahead – managing global uncertainties, and improving lives at home so that Singaporeans can continue to live and age well.

“Entering 2026, I hope Singaporeans will stay united, care for one another, and continue building a prosperous and resilient nation for many years to come,” said SM Lee.

PM Wong said that while today’s world feels darker and more dangerous than before, history reminds everyone that Singapore has always found strength in adversity.

Sustaining the Singapore miracle requires the same spirit today, and this resolve was seen in Singapore’s football team, which qualified for the Asian Cup for the first time in history, and in the country’s performance at the SEA Games.

“These achievements remind us that when we stay focused and keep pushing on, we can overcome setbacks, rise above adversity and face uncertainty with confidence.”

PM Wong and SM Lee wished all Singaporeans a very happy New Year.