2025 Singapore Elections Amidst Economic Strains
Yirong Han | 23 April 2025
Summary
Singapore’s upcoming 3 May 2025 election, with the ruling People’s Action Party (PAP) seeking to maintain dominance, presents Prime Minister Lawrence Wong with a leadership test amid rising public dissatisfaction.
Current economic strains, marked by significant increases in living costs and a downgraded growth forecast of 0-2%, are pivotal to the upcoming election's dynamics.
The election outcome will likely have significant implications for Singapore’s foreign relations, especially amid escalating US-China trade tensions, possibly compelling a recalibration of foreign policy and disrupting regional influence.
Singapore’s upcoming election poses significant challenges to the ruling People’s Action Party (PAP). Governing since 1965, the PAP previously secured 61.24% of the vote and 83 out of 93 seats in the 2020 election. However, increasing public concern about economic conditions and tight government control test its dominance. It’s worth noting that Singapore’s election laws and system, particularly the structure of multi-member constituencies, are viewed as factors that contribute to the PAP’s continued electoral success. This election represents a pivotal moment as the PAP is expected to be challenged for all 97 parliamentary seats, with more than 30 new PAP candidates - this election can reshape the political landscape and possibly signal a shift towards a more inclusive governance.
Economic Policy Direction
The upcoming election carries profound implications for Singapore’s economic policy. High living costs, driven by rising inflation and stagnant wages, are voter’s primary concerns. Prime Minister Lawrence Wong’s cash handouts following Covid-19 are widely viewed as insufficient, reflecting deeper dissatisfaction with the current economic model.
Should the PAP secure a decisive mandate, Wong will likely implement additional measures in line with the recently announced budget, which includes a substantial SGD 1.06b (USD 790m) in vouchers to offset grocery and food costs, providing citizens with at least SGD 600 (USD 450) each for necessities. However, this was criticised by the opposition, as a recent February poll revealed residents believe such measures inadequately address cost-of-living concerns.
Conversely, if opposition parties gain increased representation beyond their current 10 seats, it is likely to necessitate policy recalibrations that focus on wealth inequality and the gig economy. Such changes will likely include increased taxes on high earners and stronger protections for gig workers, who often lack traditional benefits. The extent of these recalibrations will depend on the opposition’s electoral gains and their ability to influence policy direction.
These initiatives are part of broader strategic investments, including an SGD 1b (USD 761m) allocated to strengthen the semiconductor and biotech sectors with the construction of a new fabrication facility. Wong has warned that escalating global tensions between the US and China could severely impact Singapore’s economy, potentially moderating GDP growth from 4.4% in 2024 to a projected 1.0%-3.0% in 2025. While the government’s projected surplus of SGD 6.81b (USD 5.18b) provides a buffer, it highlights the urgency for proactive policies to effectively navigate these economic challenges. The outcome of this election could serve as a critical juncture for Singapore, as the new government has to respond to both immediate concerns and prepare for long-term stability and growth.
Foreign Relations and Geopolitical Positioning
The election’s outcome will significantly impact Singapore’s foreign relations amid escalating US-China tensions. A re-elected Wong administration would likely re-affirm Singapore’s alignment with the United States., which has grown increasingly estranged as Wong voiced disappointment over US trade policies.
In an unlikely scenario of substantial opposition gains, Singapore’s foreign policy has a realistic possibility of being altered with a balanced approach towards the US and China. Persistent gains for the opposition could create a more fragmented political landscape, with the potential for the opposition to hold up to 30% of parliamentary seats by 2028, compelling the PAP to adapt its policies. Such a recalibration carries the risk of alienating key allies and undermining Singapore’s credibility as a reliable partner.
Navigating the ongoing US-China trade tensions and rising global protectionism will be an ongoing challenge for Singapore, regardless of the election outcome. The new government will need to balance economic pragmatism with strategic alliances to preserve Singapore’s regional influence and security. Failure to do so could weaken strategic positioning and limit its ability to act as a neutral mediator, undermining its long-term prosperity.
Forecast
Short-term (Now - 3 months)
The PAP is very likely to retain its majority in the upcoming election, although its share of the popular vote is likely to decline to around 50-60%, compelling strategic adjustments in policy focus to address public concerns more effectively.
Medium-term (3-12 months)
If re-elected, the Wong administration will likely prioritise economic recovery through initiatives aimed at enhancing social welfare and the cost of living.
However, failure to achieve tangible improvements in these areas could lead to increased social unrest. Specifically, if inflation rises above 2.5%, increased calls for government intervention and potential disruptions to economic activity are likely to occur.
Long-term (>1 year)
Persistent gains by opposition parties are likely to lead to a more fragmented political landscape and possible re-evaluation of Singapore’s foreign policy. By 2028, the opposition could hold up to 30% of parliamentary seats, possibly forcing the PAP to adopt a more consensus-based approach to governance.
The ongoing US-China trade war is likely to continue to impact Singapore’s economy, regardless of the election outcome. A shift towards a more protectionist global trade environment could significantly impact Singapore’s export-oriented economy, requiring diversification of trade partners and a focus on domestic demand.
