Its GDP grew 5.7% in the fourth quarter from a year earlier and 1.9% from the third quarter, according to advance estimates from the trade ministry.

In his New Year message on Wednesday, Prime Minister Lawrence Wong said while full-year growth was stronger than expected in 2025, it would be challenging to sustain that pace of growth this year.

Wong pegged last year’s growth to U.S. tariffs being imposed later and at lower levels than expected, and an AI- surge in demand for semiconductors and electronics.

In November, the trade ministry had raised its GDP growth forecast for 2025 to “around 4.0%” from a previous range of 1.5-2.5%.

Friday’s data release did not include any forecasts for 2026. The ministry has previously forecast 2026 GDP growth at 1.0-3.0%.

At a review in October, the Monetary Authority of Singapore left monetary policy unchanged as growth in the city-state remained resilient despite challenges from U.S. tariffs. The next policy review is due later this month.

Singapore’s exports to the U.S. are subject to a 10% tariff. That is lower than the tariffs imposed on its Southeast Asian neighbors, but sectoral levies, including a 100% tariff on branded drugs, remain a concern.

Broader sectoral tariffs could hurt demand for Singapore’s exports, including semiconductors, consumer electronics and pharmaceutical goods. The central bank has said those three sectors account for about 40% of exports to the U.S.