Singapore’s state investment institutions face a tougher world, but their long game is paying off
GIC, Temasek and MAS show their resilience in testing times.
Singapore's national investment entities, including the GIC, Temasek, and the Monetary Authority of Singapore, have demonstrated resilience in maintaining sustainable returns amidst turbulent global market conditions since 2018. These entities, managed by the Singapore government, have weathered various challenges, such as the US-China trade war, the Covid-19 pandemic, the Russia-Ukraine war, and the Iran war, all of which have posed significant risks to businesses worldwide.
The GIC, Singapore's primary manager of government assets invested abroad, experienced its lowest 20-year annualised returns since 2020, as reported in its 2026 annual statement. However, it still managed to nearly double the inflation-adjusted purchasing power of its reserves during this period. Meanwhile, the Monetary Authority of Singapore (MAS), which oversees a globally diversified foreign reserves portfolio, recorded a net profit of $20 billion, driven by investment gains of $39.8 billion that exceeded the 10-year historical average of $18.3 billion.
MAS uses the foreign reserves to maintain an appropriate value of the Singapore dollar against other currencies. The entity has committed to contributing $1 billion to the Government's Consolidated Fund and returning $2.5 billion of its net profit to the national financial account. This income provides a significant stream of revenue to help finance part of the annual government budget, with up to 50% of the expected returns flowing directly back into Singapore's budget via the Net Investment Returns Contribution (NIRC).
The NIRC remains the single-largest source of government revenue, funding public infrastructure, healthcare subsidies, and education without relying solely on taxation. Looking ahead, the investment boom and the global economy remain resilient despite ongoing geopolitical tensions, protectionism, technological competition, and energy security concerns.
MAS expects growth in the Singapore economy to stay firm in 2026, with AI-related demand providing a significant boost. Both GIC and Temasek have reaffirmed their commitment to harnessing AI's growth potential, with GIC expanding its focus across the AI value chain and Temasek targeting growth in AI-focused investments, core-plus infrastructure, and private credit.
Written by urgent.news from Straits Times Business's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
