Singapore Warns Against Trade War Escalation as Technical Recession Looms

Singapore’s economy teeters on the brink—and the government’s playing diplomat instead of firefighter.

No tariffs, no retaliation: Just crossed fingers and a prayer that global markets won’t notice the GDP contraction. Classic ’soft power’ move while hard numbers slide.

Meanwhile, hedge funds sharpen their knives—because nothing spices up a recession like leveraged bets on sovereign distress.

Singapore’s economic slowdown raises technical recession risk

The report said that on Thursday, Singapore’s economy shrank by 0.6% on a seasonally adjusted basis in the first quarter of 2025. That raised the risk of a technical recession and stoked worries about job losses and slower hiring. Even with 3.9% year-on-year growth, officials warned of downside risks from global trade tensions, especially after the US imposed a 10% baseline tariff.

Beh Swan Gin, Permanent Secretary at the Ministry of Trade and Industry, said two consecutive quarters of contraction are likely. But he added that this may not mean a full-year recession. The ministry kept its growth forecast for 2025 at 0.0% to 2.0%, saying recent easing of trade tensions was mildly positive; however, global demand remains uncertain.

The MAS eased policy settings at its review sessions in January and April this year. After the GDP figures were released on Thursday, Robinson said he believes the current monetary policy stance is appropriate.

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