Private-sector economists have sharply raised their forecast for Singapore’s economic growth this year to 5% from 3.5%, as stronger-than-expected activity and sustained AI demand improve the outlook.
The revised projection from 21 economists and analysts surveyed by the Monetary Authority of Singapore (MAS) is within the Ministry of Trade and Industry’s official 2026 growth forecast of 4.5% to 5.5%.
Singapore’s economy grew 5.9% year-on-year in the second quarter, significantly ahead of the 4.3% growth respondents had expected in the previous survey. This followed 6.3% growth in the first quarter.
Economists expect growth to moderate to 4.6% in the third quarter and 3.6% in the final quarter.
The stronger outlook comes as Singapore continues to benefit from the technology cycle, with all respondents identifying a sustained AI-driven upturn as a key upside factor for the economy.
A de-escalation or resolution of the Middle East conflict and stronger-than-expected global growth were also cited as potential boosts.
However, an escalation or prolonged Middle East conflict and a bursting of the AI bubble, together with spillovers into financial markets, were the most frequently cited downside risks.
Economists have meanwhile lowered their inflation forecasts for 2026, with headline inflation now expected at 2.1%, down from 2.3%, while core inflation is seen at 1.9%, compared with 2% previously.
For 2027, respondents expect Singapore’s economy to grow 3.1%, with both headline and core inflation forecast at 2%.
On monetary policy, 45% of respondents expect MAS to tighten policy in October by increasing the slope of the Singapore dollar nominal effective exchange rate (S$NEER) policy band, up from 30% in the previous survey.
CNA
