Singapore’s economy projected to grow 2–3% annually over next decade: Gan Kim Yong

Singapore’s projected GDP growth rate of 2% to 3% per annum over the next decade is supported by expected productivity growth of around 1% to 2% and workforce growth of around 1%, said Deputy Prime Minister and Minister for Trade and Industry Gan Kim Yong in a written parliamentary reply on 25 September 2025.

He noted that the slowdown in workforce growth is due to Singapore’s ageing population and declining birth rates.

Gan was responding to a question from Member of Parliament Chua Kheng Wee Louis (Sengkang GRC), who had asked about the Ministry of Trade and Industry’s (MTI) assumptions behind its GDP growth projection, the long-run target rate, and the key drivers for achieving higher growth.

Gan explained that while the 2% to 3% rate is comparable to the growth of many small, open economies such as Switzerland, Singapore should seek to exceed this trend growth in the near term.

He said MTI aims to take advantage of a “window of opportunities” arising from structural shifts in the global economy to achieve a faster pace of growth in the coming years. This, he said, would help position Singapore’s economy on a strong footing to remain globally competitive over the long term.

Economic Strategy Review to drive transformation

As part of these efforts, the Government has initiated the Economic Strategy Review (ESR) to refresh Singapore’s economic blueprint for the evolving global landscape.

Through the ESR, the Government will explore ways to anchor and grow higher value-added industries in Singapore. It will also examine how to leverage technologies such as artificial intelligence to boost productivity more significantly.

“If we succeed in our efforts,” Gan said, “Singapore may be able to achieve above-trend GDP growth of 3% to 4% per annum over the next few years, and maybe more in very good years.”

He added that higher growth would support good real wage increases for Singaporeans and improve national resilience amid global uncertainties.

Challenges and opportunities

Gan’s remarks build on his earlier address in Parliament on 22 September, where he emphasised the need for Singapore to pursue faster-than-expected growth despite a challenging external and domestic environment.

He identified key constraints, including rising global trade fragmentation, increased competition for investment, and growing prioritisation of national economic security.

Domestically, Singapore faces an ageing workforce, limited land and carbon resources, and rapid technological change that could disrupt industries and jobs.

At the same time, Gan highlighted several opportunities that could support stronger economic performance.

He pointed to technology—including AI, robotics, and automation—as potential productivity drivers, alongside emerging sectors such as green manufacturing, clean energy, and sustainable finance.

The Government also sees prospects in industries like precision medicine, autonomous vehicles, and space.

Regional growth outlook

Singapore’s regional context also offers advantages. Gan noted that South-east Asia presents growth potential due to its youthful demographics, rising middle class, and improving connectivity, both digital and physical.

Earlier, on 12 August, MTI revised Singapore’s 2025 GDP growth forecast upward to 1.5%–2.5%, from an earlier estimate of 0%–2%, citing a stronger-than-expected performance in the first half of the year.

The economy expanded by 4.3% in the first six months, buoyed by a surge in exports as companies moved shipments ahead of potential US tariffs.

MTI warned, however, that these gains may not be sustained in the second half of the year. Risks from trade tensions and sector-specific levies remain, especially as the US continues negotiations on its reciprocal tariffs policy.