Economists raise their Singapore growth forecasts for 2025 and 2026: MAS survey

SINGAPORE - Private sector economists expect Singapore’s economy to grow 4.1 per cent in 2025 and 2.3 per cent in 2026, higher than their previous forecasts, amid an improved outlook for exports, manufacturing, finance, construction, and wholesale and retail trade.

The economists had earlier predicted Singapore’s gross domestic product to increase by 2.4 per cent in 2025 and 1.9 per cent in 2026.

The latest estimates in the quarterly survey of professional forecasters by the Monetary Authority of Singapore (MAS) released on Dec 17 follows the Ministry of Trade and Industry (MTI) raising its growth forecast in November.

MTI

hiked its projection of growth in 2025 to about 4 per cent

from the 1.5 per cent to 2.5 per cent range it had forecast in August. In its first forecast for 2026, MTI said the economy is likely to grow by a slower pace of 1 per cent to 3 per cent.

Economists in the MAS survey saw the possibility of an upside to their forecasts if the artificial intelligence (AI)-led technology upcycle is sustained, while global economic growth remains resilient and trade tensions continue to ease.

They still warned of downside risks to Singapore’s economic outlook if trade tensions escalate, or the AI bubble in the US stock market bursts. The latter could have negative spillover effects on the broader financial market and the global economy, they said.

Geopolitical tensions, including the introduction of semiconductor and pharmaceutical tariffs, have emerged as the foremost downside risk to Singapore’s economic outlook.

US President Donald Trump said in August that the US could initially place a “small tariff” on pharmaceutical imports, before hiking tariffs to 150 per cent within 18 months and eventually to 250 per cent, in an effort to boost domestic production. He did not specify the initial tariff rate.

He also said then that he plans to announce tariffs on semiconductors and chips, but gave no further details.

The 20 economists who responded to the latest MAS survey sent out on Nov 21 expect the economy to grow by 3.6 per cent year on year in the fourth quarter of 2025.

They also raised their 2025 forecast for almost all major indicators of economic growth.

Manufacturing growth is now seen at 5.4 per cent, up from just 0.8 per cent in the previous survey. Finance and insurance is set to grow at 4.1 per cent compared to the previous projection of 3.3 per cent.

Growth in wholesale and retail trade was raised to 4.4 per cent from 2.9 per cent, and non-oil domestic exports to 4.5 per cent from 2.2 per cent.

The forecast for 2025 inflation, as measured by the consumer price index for all-items, was unchanged at 0.9 per cent. The latest median forecast for core inflation – which excludes private transport and accommodation costs to better represent household expenses – was also kept at 0.7 per cent.

The median forecast for 2025 all-items was 1.5 per cent, and it was 1.3 per cent for core inflation.

MAS expects core inflation to come in at around 0.5 per cent in 2025 before rising to within a range of 0.5 per cent to 1.5 per cent in 2026. All-Items inflation is expected to average between 0.5 per cent and 1 per cent in 2025 and 0.5 per cent and 1.5 per cent in 2026.

Nearly all the respondents to the latest MAS survey do not anticipate any monetary policy shift in the January and April 2026 policy reviews by the central bank.