Singapore averted a recession in the second quarter, official data showed Monday, but the government warned of “significant uncertainty” ahead owing to the effects of US President Donald Trump’s tariffs.

Preliminary estimates from the trade ministry show that the economy grew 4.3 per cent year-on-year in the three months to June, extending the 4.1 per cent expansion in the first quarter.

It grew 1.4 percent quarter-on-quarter, swinging back from after shrinking 0.5 percent in the first three months of the year.

The reading means the city-state avoided a technical recession, defined as two successive quarters of contraction.

The key manufacturing sector expanded 5.5 per cent on-year during the quarter, picking up from 4.4 per cent in the previous three months as businesses rushed to beat the imposition of higher US tariffs.

Manufacturing covers Singapore’s key semiconductor exports.

Nevertheless, the government offered a note of caution for the rest of the year.

“Looking forward, there remains significant uncertainty and downside risks in the global economy in the second half of 2025, given the lack of clarity over the tariff policies of the US,” the trade ministry said in a statement.

While Trump imposed a baseline 10 per cent tariff on Singapore, the city-state is vulnerable to a global economic slowdown caused by the much higher levies on dozens of other countries because of its heavy reliance on international trade.

In the latest move, Trump threatened 30 per cent tolls on the European Union, a key Singapore market, if no agreement is reached by August 1.

The government said it expected the economy to grow 0-2.0 per cent this year, a downgrade from its previous growth forecast of between one and three per cent.

Stock Market Poised For Biggest IPO In Years

The country’s stock market is poised for its largest listing in eight years, Monday with the debut of a real estate investment trust (REIT) focused on data centres.

Valued at US$773 million, the trust NTT DC REIT is backed by the city’s sovereign wealth fund and Japan’s NTT group.

It is expected to give a much-needed boost to the Singapore Exchange (SGX), which has seen lacklustre interest for major listings in recent years.

Data centres are an area of phenomenal growth owing to the global need to store massive amounts of digital data and run energy-intensive artificial intelligence tools.

Trading in NTT DC REIT in US dollars will start at 2 pm (0600 GMT), the managers of the initial public offering said in an announcement on the SGX website.

It will be the biggest listing on the exchange since 2017, when fibre network-centred NetLink NBN Trust raised SG$2.3 billion (US$1.8 billion).

NTT DC REIT is backed by Singapore’s GIC, one of the world’s biggest sovereign wealth funds, and Japan’s telecommunications giant NTT Group.

The NTT Group, through its global data centre business NTT GDC, is the world’s third-largest data centre provider, according to the IPO’s prospectus.

Singapore is a leading hub for data centres in Asia, with its strategic location at the crossroads of submarine cable routes providing connectivity to the region and beyond.

READ ALSO: Markets Mixed As Traders Cautiously Eye Trade Developments

From 2024 to 2027, the power used by data centres is expected to rise at a compounded annual growth rate of 27.5 per cent, following double-digit expansion over the past five years, the prospectus said.

AFP