SINGAPORE: Singapore delivered a stronger-than-expected growth of 4.8 per cent this year, even amid fractured trade and geopolitical tensions globally, Prime Minister Lawrence Wong said on Wednesday (Dec 31).
“This is a better outcome than we expected, given the circumstances,” said Mr Wong in his New Year message.
However, he noted that Singaporeans must be realistic that “sustaining this pace of growth will be challenging”.
“To remain competitive, we cannot simply do more of the same. We must rethink, reset, and refresh our economic strategies,” said Mr Wong.
He added that his deputy Gan Kim Yong – who is Minister for Trade and Industry – is leading a team of younger political office holders in the effort. Their first set of proposals will be released soon, and the government will respond at Budget 2026, he said.
This year’s growth surpasses last year’s 4.4 per cent, and has also outperformed the 4.1 per cent predicted by private sector economists and the official Monetary Authority of Singapore (MAS) forecast of around 4 per cent.
Mr Wong said Singapore’s 2025 performance was because “global economic growth turned out to be more resilient than anticipated”.
For one, the United States’ tariffs were imposed later and at lower levels than many had feared, he said.
Singapore also benefitted from the surge in demand for semiconductors and electronics driven by the artificial intelligence (AI) boom, said Mr Wong.
“As a result, unemployment and inflation remained low, and real incomes have risen across the board,” he said.
Mr Wong noted, however, that the fractured trade and geopolitical tensions are permanent features of a fragmented world. Moving forward, Singapore will face more obstacles to its growth and greater inflationary pressures, headwinds which it cannot fully shield itself from as a small and open economy, he said.
The past year has “marked a major turning point”, with the end of the global order that countries had long operated in, said Mr Wong.
“Longstanding assumptions about open markets and win-win cooperation are being questioned and sometimes rejected. Countries are reconfiguring trade networks and supply chains in the name of resilience and security,” he said.
He said that geopolitical tensions have also deepened, with the war in Ukraine showing no signs of ending and the situation in Gaza remaining precarious. “In many parts of the world, tensions rooted in identity and belief continue to spill over into violence,” he said.
Mr Wong added that closer to home, Thailand and Cambodia have clashed over disputed border areas. While a ceasefire has since been reached, sustained restraint and dialogue will be essential to secure a durable peace, he said.
“Taken together, these developments have made the world less predictable and secure. We must remain vigilant against security threats, even as risks in our region and beyond continue to evolve,” he said.
Despite the challenges ahead, Mr Wong said Singapore can press on confidently as “we are dealing with them from a position of strength”.
“Singapore’s international standing is high, and our brand is trusted and respected,” he noted.
Mr Wong said that amid global uncertainties, many companies are turning to Singapore as a trusted base because they seek stability. They include major players, like tech giant Microsoft, and startups and growth companies from around the world, he said.
During his overseas visits, he had also seen how Singapore’s reputation opens doors and creates opportunities for its businesses and people.
“From Africa to Latin America, our firms are carving out new niches and making their mark. We will continue to support our companies, as they expand, scale up, and seize overseas opportunities,” said Mr Wong.
At home, the government remains focused on ensuring that “every Singaporean benefits from the nation’s progress”, said Mr Wong.
“Alongside the labour movement and employers, we will help every worker grow and progress in their careers, so they can see tangible gains for themselves and their families,” he said.
“Beyond jobs, we will continue improving the basics in life – education, housing, and healthcare – so every Singaporean has security and peace of mind.”
Social safety nets will also be reinforced to ensure that no one is left behind, said Mr Wong.
Lower-income families will be uplifted not just through financial assistance, but by empowering them to build a better future for themselves.
Persons with disabilities and their caregivers will receive more support, with improved access to services and expanded opportunities for meaningful work and independent living, letting them plan for the future with greater confidence, he said.
Longer-term challenges, such as an ageing population and securing clean energy supply, must also be confronted, said Mr Wong.
Like many advanced economies, Singapore’s population is rapidly ageing while its birth rates are declining, said the prime minister.
“We will continue to support young Singaporeans who want to marry, settle down and have children, by addressing their concerns – from housing to childcare and education,” he said.
“We will create an environment where families can grow and thrive, and society remains vibrant and forward-looking.”
This includes staying open and welcoming those who "embrace" the Singapore way of life as fellow citizens, said Mr Wong.
“Together, these efforts will help strengthen our shared values and identity, and maintain a strong and cohesive Singaporean core.”
Longer lifespans will also have far-reaching implications for healthcare, work and retirement, and these issues are being studied holistically, said Mr Wong.
A Tripartite Workgroup on Senior Employment is reviewing strategies for seniors to work meaningfully in age-friendly workplaces, while efforts to strengthen retirement adequacy continue, especially for lower- and middle-income workers who need more support, he said.
Mr Wong said that Singapore will also secure a reliable supply of clean energy to power the energy-intensive industries of the future, including AI.
One strategy is to import green energy, and work towards the longer-term goal of an ASEAN Power Grid, he said.
Singapore is also pursuing its own clean solutions, with possible options such as low-carbon hydrogen and nuclear energy, said Mr Wong.
“In our early years of nation-building, water was an existential threat. Through hard work and ingenuity, we created NEWater. Now, clean energy is our new frontier and next major challenge. Just as we did with water, we must turn this vulnerability into a source of strength,” he said.
Mr Wong said the challenges ahead are complex and will require Singaporeans to be bold, creative and open to new solutions.
“We will have many discussions and robust debates. But we must never allow our differences to divide us. Instead, we must harness our diverse perspectives to chart a new path forward – as one united people,” he said.
Despite the world today seeming “darker and more dangerous than before”, Singapore has always found strength in adversity, noted Mr Wong.
“We endured and progressed because we refused to be defeated – because we faced challenges together, with courage and quiet determination. Sustaining the Singapore miracle requires the same spirit from all of us today,” he said.
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“This is a better outcome than we expected, given the circumstances,” said Mr Wong in his New Year message.
However, he noted that Singaporeans must be realistic that “sustaining this pace of growth will be challenging”.
“To remain competitive, we cannot simply do more of the same. We must rethink, reset, and refresh our economic strategies,” said Mr Wong.
He added that his deputy Gan Kim Yong – who is Minister for Trade and Industry – is leading a team of younger political office holders in the effort. Their first set of proposals will be released soon, and the government will respond at Budget 2026, he said.
This year’s growth surpasses last year’s 4.4 per cent, and has also outperformed the 4.1 per cent predicted by private sector economists and the official Monetary Authority of Singapore (MAS) forecast of around 4 per cent.
Mr Wong said Singapore’s 2025 performance was because “global economic growth turned out to be more resilient than anticipated”.
For one, the United States’ tariffs were imposed later and at lower levels than many had feared, he said.
Singapore also benefitted from the surge in demand for semiconductors and electronics driven by the artificial intelligence (AI) boom, said Mr Wong.
“As a result, unemployment and inflation remained low, and real incomes have risen across the board,” he said.
Mr Wong noted, however, that the fractured trade and geopolitical tensions are permanent features of a fragmented world. Moving forward, Singapore will face more obstacles to its growth and greater inflationary pressures, headwinds which it cannot fully shield itself from as a small and open economy, he said.
SINGAPORE IN POSITION OF STRENGTH
The past year has “marked a major turning point”, with the end of the global order that countries had long operated in, said Mr Wong.
“Longstanding assumptions about open markets and win-win cooperation are being questioned and sometimes rejected. Countries are reconfiguring trade networks and supply chains in the name of resilience and security,” he said.
He said that geopolitical tensions have also deepened, with the war in Ukraine showing no signs of ending and the situation in Gaza remaining precarious. “In many parts of the world, tensions rooted in identity and belief continue to spill over into violence,” he said.
Mr Wong added that closer to home, Thailand and Cambodia have clashed over disputed border areas. While a ceasefire has since been reached, sustained restraint and dialogue will be essential to secure a durable peace, he said.
“Taken together, these developments have made the world less predictable and secure. We must remain vigilant against security threats, even as risks in our region and beyond continue to evolve,” he said.
Despite the challenges ahead, Mr Wong said Singapore can press on confidently as “we are dealing with them from a position of strength”.
“Singapore’s international standing is high, and our brand is trusted and respected,” he noted.
Related:
Mr Wong said that amid global uncertainties, many companies are turning to Singapore as a trusted base because they seek stability. They include major players, like tech giant Microsoft, and startups and growth companies from around the world, he said.
During his overseas visits, he had also seen how Singapore’s reputation opens doors and creates opportunities for its businesses and people.
“From Africa to Latin America, our firms are carving out new niches and making their mark. We will continue to support our companies, as they expand, scale up, and seize overseas opportunities,” said Mr Wong.
DOMESTIC FOCUS
At home, the government remains focused on ensuring that “every Singaporean benefits from the nation’s progress”, said Mr Wong.
“Alongside the labour movement and employers, we will help every worker grow and progress in their careers, so they can see tangible gains for themselves and their families,” he said.
“Beyond jobs, we will continue improving the basics in life – education, housing, and healthcare – so every Singaporean has security and peace of mind.”
Social safety nets will also be reinforced to ensure that no one is left behind, said Mr Wong.
Lower-income families will be uplifted not just through financial assistance, but by empowering them to build a better future for themselves.
Persons with disabilities and their caregivers will receive more support, with improved access to services and expanded opportunities for meaningful work and independent living, letting them plan for the future with greater confidence, he said.
Related:
LOOKING FURTHER AHEAD
Longer-term challenges, such as an ageing population and securing clean energy supply, must also be confronted, said Mr Wong.
Like many advanced economies, Singapore’s population is rapidly ageing while its birth rates are declining, said the prime minister.
“We will continue to support young Singaporeans who want to marry, settle down and have children, by addressing their concerns – from housing to childcare and education,” he said.
“We will create an environment where families can grow and thrive, and society remains vibrant and forward-looking.”
This includes staying open and welcoming those who "embrace" the Singapore way of life as fellow citizens, said Mr Wong.
“Together, these efforts will help strengthen our shared values and identity, and maintain a strong and cohesive Singaporean core.”
Longer lifespans will also have far-reaching implications for healthcare, work and retirement, and these issues are being studied holistically, said Mr Wong.
A Tripartite Workgroup on Senior Employment is reviewing strategies for seniors to work meaningfully in age-friendly workplaces, while efforts to strengthen retirement adequacy continue, especially for lower- and middle-income workers who need more support, he said.
Mr Wong said that Singapore will also secure a reliable supply of clean energy to power the energy-intensive industries of the future, including AI.
One strategy is to import green energy, and work towards the longer-term goal of an ASEAN Power Grid, he said.
Singapore is also pursuing its own clean solutions, with possible options such as low-carbon hydrogen and nuclear energy, said Mr Wong.
“In our early years of nation-building, water was an existential threat. Through hard work and ingenuity, we created NEWater. Now, clean energy is our new frontier and next major challenge. Just as we did with water, we must turn this vulnerability into a source of strength,” he said.
Mr Wong said the challenges ahead are complex and will require Singaporeans to be bold, creative and open to new solutions.
“We will have many discussions and robust debates. But we must never allow our differences to divide us. Instead, we must harness our diverse perspectives to chart a new path forward – as one united people,” he said.
Despite the world today seeming “darker and more dangerous than before”, Singapore has always found strength in adversity, noted Mr Wong.
“We endured and progressed because we refused to be defeated – because we faced challenges together, with courage and quiet determination. Sustaining the Singapore miracle requires the same spirit from all of us today,” he said.
Continue reading...