Singapore’s economy expanded in the second quarter, avoiding a technical recession on a rise in construction activity and strong exports as businesses seek to front-run higher US tariffs.

Gross domestic product grew 1.4% on a seasonally adjusted basis in the three months through June, the Ministry of Trade and Industry said Monday, versus a forecast for a 0.8% increase and a revised 0.5% contraction in the first quarter.

GDP in the quarter also expanded from a year earlier, at 4.3%. That compares with a median forecast of 3.6% growth in a Bloomberg survey of economists.

The data will come as a relief after the trade ministry had flagged the risk of a recession following a contraction at the start of 2025. Economists expect the central bank, the Monetary Authority of Singapore, will likely remain cautious, as it predicts the unwinding of some regional export front-loading to intensify in the second half of the year.

“Looking forward, there remain significant uncertainty and downside risks in the global economy in the second half of 2025,” the ministry said in a press release, “given the lack of clarity over the tariff policies of the US.”

Singapore, which was hit with a 10% tariff, got off relatively lightly compared with its neighbors. But with trade equaling about three times its GDP, the city-state remains acutely exposed to any sustained slowdown in global commerce.

The government earlier downgraded forecast for 2025 GDP growth at 0%-2% as US tariffs clouded the outlook for global trade, and has indicated it might revise it if necessary.

A temporary de-escalation of trade tensions following the US-China tariff truce should slightly improve Singapore’s external demand outlook for the rest of the year.

Bloomberg Economics expects the road ahead to be “even more difficult as more US tariffs get implemented and demand for exports gets satiated by front-loading,” said Tamara Mast Henderson, ASEAN economist for Bloomberg Economics. She expects Singapore’s growth to slow to 0.9% this year.