In Focus: Singapore

Key Highlights in 2025

Singapore, a city-state spanning 734 square kilometres with a population of approximately 6.04 million, remains one of the world’s top travel and business destinations. Its modern infrastructure, cultural diversity, and strategic location continue to attract millions of visitors annually.

In 2025, Singapore’s tourism sector continued to demonstrate resilience, with international visitor arrivals increasing by 2.3% year-on-year. Passenger traffic grew by 3.4%, surpassing pre-pandemic 2019 levels for the first time since the COVID-19 outbreak. While overall hospitality performance moderated slightly, with a 0.7% marginal decline in revenue per available room (RevPAR), hotel investment activity remained robust, with total transaction volume exceeding SGD1.2 billion.

Tourism demand in 2025 was supported by several key developments. New attractions, including the Mandai Wildlife Reserve and the Singapore Oceanarium at Resorts World Sentosa, opened during the year, while existing attractions introduced enhancements such as Jurassic World: The Experience at Gardens by the Bay’s Cloud Forest. Singapore also hosted several high-profile events, including the World Aquatics Championships 2025, the first time the event was held in Southeast Asia, alongside the POP TOY SHOW 2025, regionally exclusive concerts, and recurring events such as the Formula 1 Singapore Grand Prix. These initiatives, together with a growing focus on attracting higher-spending visitors, reflect a strategic shift towards a lower-volume, higher-value tourism model.

Looking ahead to 2026, Singapore’s tourism sector is expected to maintain its upward trajectory, supported by continued investment in attractions and hospitality infrastructure, ongoing rejuvenation efforts, and a strong pipeline of major international events, alongside further emphasis on higher-value tourism segments. 

Economic Outlook

In 2025, Singapore’s economy recorded solid growth, with GDP expanding by 5.0%, slowing slightly from 5.3% in 2024. Growth was held up by global demand, particularly for semiconductor and electronic exports, alongside resilient domestic consumption. The fiscal position improved, with the budget balance reaching a surplus of 0.5%, following a turnaround in 2024 after several years of deficits.

Looking ahead, GDP growth is projected to moderate to 3.2% in 2026 before stabilising at around 2.2% to 2.3% annually over the longer term. Lending interest rates, which peaked at 3.6% in 2023, have declined and are expected to remain below 2.0% through 2030. Supported by continued investments in infrastructure and sustainability initiatives, Singapore’s diversified economy is expected to remain resilient despite ongoing external uncertainties.

Economic Performance & Outlook

Singapore’s GDP is projected to grow by 3.2% in 2026, supported by sustained global demand for semiconductors and electronic products. The moderation from the 5.0% growth recorded in 2025 reflects increasing uncertainties surrounding global trade, particularly tariff-related tensions that may weigh on exports and investment flows. The potential impact of US-driven trade shocks could also dampen domestic demand through softer foreign direct investment inflows and a more cautious labour market outlook. Over the longer term, the services sector is expected to remain the primary driver of economic growth, supported by resilient domestic consumption and Singapore’s continued role as a regional hub for finance, trade, and business services.

Currency Exchange Outlook

Singapore has historically maintained a relatively stable exchange rate under the Monetary Authority of Singapore’s (MAS) exchange-rate based policy framework. Amid rising global uncertainties, the Singapore dollar is increasingly viewed as a regional safe-haven currency. As a result, the currency is projected to appreciate modestly against the US dollar in the near term, averaging around SGD1.24 per USD1.

Inflation

EIU reported that Singapore’s inflation rate moderated significantly in 2025, declining to approximately 0.9%, supported by government measures aimed at easing cost-of-living pressures, including targeted fiscal transfers and subsidies. Looking ahead, inflation is expected to normalise gradually, with MAS anticipated to maintain price stability and manage inflation at just under 2.0% over the medium term through a combination of its exchange-rate based monetary policy framework. This outlook is supported by continued cost management measures, including price controls on essential goods, amid external pressures such as elevated energy costs linked to ongoing geopolitical tensions.

Interest Rates

As of 31 March 2026, the 3-month SORA rate stands at 1.07%, while the 1-month rate is 1.03%, reflecting a low interest rate environment. In the United States, the Federal Reserve has maintained policy rates at 3.5% to 3.75%, the highest in over a decade, in response to persistent inflationary pressures, driven by rising energy costs linked to the ongoing war in Iran. Against this backdrop, Singapore’s interest rates are expected to ease gradually, with the EIU forecasting lending rates to decline from 1.8% in 2025 to 1.4% in 2026. This is supported by a more accommodative rate environment.

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Media Contact

Hok Yean Chee

Regional President – HVS Asia Pacific [email protected]