Prime Minister Lawrence Wong said Singapore performed better than anticipated amid challenges ahead in sustaining growth.
“Our economy performed better-than-expected” despite the world becoming “less predictable and secure,” PM Wong said in his New Year message on the eve of the New Year.
Singapore posted stronger-than-expected economic growth of 4.8 per cent in 2025.
Unemployment and inflation remained low and real incomes rose across the board, PM Wong said.
He cautioned that sustaining the pace of growth will be challenging and fears fractured trade and geological tensions would be more permanent than desired.
PM Wong also cautioned that Singapore faces “more obstacles to growth” and “inflationary pressures may intensify” being a small and open economy.
He said Singapore cannot follow the old ways and must “rethink, reset and refresh” its economic strategies.
Deputy Prime Minister Gan Kim Yong and his team is leading the effort and “their first set of proposals will be released soon,” he said. “The Government will respond at the Budget 2026.”
PM Wong also commended Singapore’s position of strength would enable it to deal with these challenges.
Major companies like Microsoft, including start-ups are seeking stability and turning to Singapore as a launch pad to the region, reflecting the country’s high international standing as well as its trusted and respected brand.
PM Wong noted that Singapore’s reputation opens doors and creates opportunities for businesses and people, with local firms carving out new niches and making their mark in places like Africa and Latin America during his overseas trips.
He said the Government will continue to support local companies as they expand, scale up and seize overseas opportunities.
Focus on Basics
PM Wong said the Singapore government will continue to improve the basic lives of Singaporeans amid long-term challenges.
His cabinet will help every worker grow and progress in their careers, so they can see tangible gains for themselves and their families.
He also spoke about improving the basics in life including education, housing and healthcare, to provide Singaporeans with a sense of security and peace of mind.
He said financial assistance will be rendered for lower-income families, including enhancement of support for people with disabilities and their caregivers.
PM Wong highlighted three long-term challenges to be tackled.
The population is rapidly ageing as birth rates decline. While the government will continue to support young Singaporeans who want to marry and have children, it does not rule out bringing in new citizens.
Longer lifespans will have implications for healthcare, work and retirement.
A tripartite workgroup on senior employment is reviewing strategies for age-friendly workplaces, while retirement adequacy is also being strengthened for lower- and middle-income workers.
Singapore will secure reliable clean-energy supplies to power energy-intensive industries of the future, including AI.
PM Wong said Singapore is considering importing green energy and working towards a longer-term goal of an Asean power grid, as well as pursuing its own green-energy solutions, such as low-carbon hydrogen and nuclear energy.
“The challenges ahead are complex. They will require us to be bold, creative and open to new solutions,” said PM Wong.
He praises the historical achievements of the sports teams at the recent SEA Games.
“These achievements remind us that when we stay focused and keep pushing on, we can overcome setbacks and rise above adversity.”
“So let us carry this mindset into the new year—resilient and united, determined and hopeful—as we write the next chapter of our Singapore story together,” he added.
