The Singapore economy expanded by 4.4% on year in 2024, and is forecast to grow between 1% to 3% on year in 2025, the city-state's Ministry of Trade and Industry (MTI) said on Friday.

Singapore's GDP expanded by 5% on year in the fourth quarter, cooling a bit from the 5.7% on-year expansion logged in the third quarter, the MTI reported.

The recent global AI-tech boom gave the Singaporean economy a boost in 2024, especially in the latter half, said the government agency.

"In particular, the electronics cluster of the manufacturing sector and machinery, equipment and supplies segment of the wholesale trade sector grew robustly on account of the upturn in the global electronics cycle," advised MTI.

The city-state's finance and insurance sector in 2024 grew on the back of strong fees and commissions, although Singapore's "retail trade and food & beverage services sectors contracted, partly due to locals shifting their spending to overseas travel destinations," said MTI.

For 2025, the city-state will be affected by the uncertain outlooks for trade with China and the US, and the moderating economic growth of the world's two largest economies, said the MTI.

Prospects for economic expansion in Europe are better, due to a likely more accommodative monetary policy in 2025, added the MTI.

"Against this backdrop, the manufacturing and trade-related services sectors in Singapore are expected to continue to expand in 2025, although their pace of growth is likely to moderate from 2024 levels," explained the MTI.

In addition, domestic consumption in Singapore could remain sluggish in 2025.

The "growth of consumer-facing sectors such as retail trade and food & beverage services is likely to remain lackluster, weighed down in part by locals shifting their spending overseas, even though the continued recovery in international visitor arrivals should provide some support," said MTI.