Singapore recorded stronger-than-expected economic growth of 4.8% in 2025, helping to stabilise the labour market and support real income growth, even as global uncertainty and geopolitical tensions intensified. Prime Minister Lawrence Wong said the performance had kept unemployment and inflation low, offering short-term relief to workers and employers amid a volatile global backdrop.
However, speaking in his New Year message on December 31, PM Wong cautioned that sustaining this pace of growth will be difficult and that Singaporeans must be realistic about the challenges ahead. He stressed that the Republic cannot rely on existing economic models and must “rethink, reset and refresh” its strategies to remain competitive, with direct implications for jobs, skills and workforce resilience.
Growth in 2025 was driven in part by a surge in global demand linked to artificial intelligence, particularly for semiconductors and electronics, sectors that employ a significant share of Singapore’s skilled workforce. Global growth also proved more resilient than expected, while US tariffs were introduced later and at lower levels than feared, easing immediate pressure on export-oriented industries.
PM Wong said fractured trade, reconfigured supply chains and geopolitical tensions are no longer temporary shocks but permanent features of the global economy. These shifts, he warned, could increase inflationary pressures and create new obstacles to job creation, especially for a small, open economy like Singapore.
Looking ahead, workforce concerns such as job security, cost of living and long-term employability are expected to feature prominently when PM Wong, who is also Finance Minister, delivers Budget 2026 on February 12. The first proposals from the Economic Strategy Review, led by Deputy Prime Minister Gan Kim Yong, will be released soon, with government responses to follow.
