Economists raise Singapore growth forecast for 2026 to 3.6% from 2.3%: MAS survey

SINGAPORE – Private-sector economists expect Singapore’s economy to grow by 3.6 per cent in 2026, higher than their previous forecast, amid an improved outlook for the manufacturing and wholesale and retail trade sectors.

This is a significant upgrade from their previous prediction of 2.3 per cent in the December 2025 survey, and comes in towards the higher end of the Government’s forecast range of 2 per cent to 4 per cent.

The latest quarterly survey of professional forecasters was sent out by the Monetary Authority of Singapore (MAS) on Feb 10. According to MAS, most of the responses were received before Feb 20, when the US imposed a new global tariff rate of 10 per cent and raised the possibility of pushing it up to 15 per cent for some countries.

Deputy Prime Minister Gan Kim Yong said on Feb 22 that despite the possibility of higher US tariffs, the Government for now is maintaining its 2026 growth forecast.

The higher forecast in the MAS survey came about as respondents raised their 2026 projections for manufacturing to 4.3 per cent from 3.6 per cent previously. The forecast for the wholesale and retail trade sector rose to 4 per cent from 2 per cent.

The forecast for non-oil domestic exports more than doubled to 4.5 per cent from 2 per cent.

However, estimates for accommodation and food services dropped to 1.3 per cent from 1.6 per cent.

For the first quarter of 2026, the MAS survey tips growth of 5.8 per cent year on year, strong but down from the 6.9 per cent expansion seen in the previous quarter. That 6.9 per cent growth far exceeded the 3.6 per cent growth tipped by respondents in the December 2025 survey.

In their first forecast for 2027, the economists surveyed estimate growth at 2.5 per cent.

Most economists in the MAS survey saw the possibility of an upside to their 2026 forecasts from a sustained artificial intelligence-led tech cycle upturn. Respondents also pointed to resilient global growth and easing of trade tensions as potential upsides.

They still warned of downside risks to Singapore’s economic outlook, the top of which is geopolitical – including an escalation in trade tensions and wars. This was followed by the risk of a so-called AI bubble burst, with negative spillovers to financial markets and the global economy.

While not specifically mentioned in the survey, Singapore is also under the threat of sector-specific US tariffs on pharmaceuticals and semiconductors – two of its top exports.

The survey’s median forecast for 2026 inflation, as measured by the consumer price index (CPI) for all items, came in unchanged at 1.5 per cent.

However, the projection for core inflation – which excludes private transport and accommodation costs to better represent household expenses – rose to 1.5 per cent from 1.3 per cent in the previous survey.

The 2027 median forecasts for both CPI-all items inflation and core inflation were at 1.7 per cent.

For the labour market, the respondents expect the overall unemployment rate, which includes non-residents, to be 2.1 per cent at the end of 2026, unchanged from the December 2025 survey.

Nearly half of the economists, or 47 per cent, expect MAS to tighten its monetary policy in April – likely in response to the uptick in core inflation.