(BSS/AFP) - Singapore averted a recession in the second quarter, official data showed Monday, but the government warned of "significant uncertainty" ahead owing to the effects of US President Donald Trump`s tariffs.

Preliminary estimates from the trade ministry show that the economy grew 4.3 percent year-on-year in the three months to June, extending the 4.1 percent expansion in the first quarter.

It grew 1.4 percent quarter-on-quarter, swinging back from after shrinking 0.5 percent in the first three months of the year.

The reading means the city-state avoided a technical recession, defined as two successive quarters of contraction.

The key manufacturing sector expanded 5.5 percent on-year during the quarter, picking up from 4.4 percent in the previous three months as businesses rushed to beat the imposition of higher US tariffs.

Manufacturing covers Singapore`s key semiconductor exports.

Nevertheless, the government offered a note of caution for the rest of the year.

"Looking forward, there remains significant uncertainty and downside risks in the global economy in the second half of 2025 given the lack of clarity over the tariff policies of the US," the trade ministry said in a statement.

While Trump imposed a baseline 10 percent tariff on Singapore, the city-state is vulnerable to a global economic slowdown caused by the much higher levies on dozens of other countries because of its heavy reliance on international trade.

In the latest move, Trump threatened 30 percent tolls on the European Union, a key Singapore market, if no agreement is reached by August 1.

The government said it expected the economy to grow 0-2.0 percent this year, a downgrade from its previous growth forecast of between one and three percent.