Economists Raise Singapore's 2026 Growth Forecast to 5%: MAS Survey

Private-sector economists have sharply raised Singapore's 2026 growth forecast to 5.0% from 3.5%, driven by a sustained AI-led tech surge, with manufacturing expected to grow 8.4% and non-oil domestic exports forecast to jump 17%.

Private-sector economists have sharply upgraded their growth forecast for Singapore's economy in 2026 to 5.0% from 3.5% in the previous survey, according to the Monetary Authority of Singapore's quarterly survey of professional forecasters released on September 2. The upgrade follows the Ministry of Trade and Industry's August revision of its official GDP growth forecast to 4.5% to 5.5%.

The AI-Driven Upgrade

A total of 21 economists and analysts responded to the survey, which was sent to 25 forecasters on August 11. All respondents identified a sustained AI-driven upturn in the technology cycle as a key support to Singapore's economic outlook. The economists also raised their growth outlook for 2027 to 3.1%.

Key Sector Upgrades

• Manufacturing: Expected to grow 8.4%, up from 5.0%.
• Finance and Insurance: Projected to increase 5.4%, up from 4.5%.
• Construction: Anticipated to climb 7.1%, up from 6.5%.
• Wholesale and Retail Trade: Forecast to grow 7.4%, up from 4.9%.
• Accommodation and Food Services: Downgraded to 1.0% from 1.8%.

Non-oil domestic exports are now expected to expand by 17% year-on-year, up sharply from the previous forecast of 6.1%.

Risks and Inflation Outlook

Escalation or prolongation of the Middle East conflict and a bursting of the AI bubble were the most frequently cited downside risks. Headline inflation is forecast at 2.1% and core inflation at 1.9%. The unemployment rate is expected to remain at 2.1%. On monetary policy, 45% of respondents expect MAS to tighten in October by increasing the slope of the policy band, up from 30% in June.

Here is the question this upgrade raises. Singapore's growth forecast has been raised to 5.0% for 2026, driven by the same AI boom that also poses a risk through a potential bubble burst. When growth is powered by such a narrow set of factors, can the city-state sustain its momentum, or is this a sign of the economy's reliance on a single technology cycle?

FAQ:

Q: What is the new growth forecast for Singapore in 2026?
A: Private-sector economists have raised Singapore's 2026 growth forecast to 5.0%, up from 3.5% in the June survey.

Q: What is driving the upgrade in Singapore's growth forecast?
A: The upgrade is driven by a sustained AI-led technology cycle, with all respondents identifying it as a key support to Singapore's economic outlook.

Q: What are the downside risks to Singapore's economic outlook?
A: The most cited downside risks are an escalation or prolonged conflict in the Middle East and a bursting of the AI bubble, with associated spillovers to financial markets.

Q: How much did the inflation forecasts change?
A: Headline inflation was lowered to 2.1% and core inflation to 1.9%.