Singapore economists see 2026 growth at 5pct, central bank survey says

Singapore's central bank survey revealed that economists have raised their growth forecast for the city-state in 2026 to 5 percent, up from the previous estimate of 3.5 percent. However, the survey also indicated that 29.4 percent of the respondents anticipate the bursting of the AI bubble, while 50 percent cited the prolonged or escalating conflict in the Middle East as a significant downside risk.

Despite these concerns, the median forecast for growth this year rose to 5 percent, while growth in 2027 is now projected at 3.1 percent, up from 2.5 percent. Singapore's economy expanded by 5.9 percent in the second quarter, surpassing expectations. The trade ministry recently increased its growth forecast for 2026 to between 4.5 and 5.5 percent.

Economists surveyed forecast core inflation for 2026 at 1.9 percent and headline inflation at 2.1 percent, both lower than previous projections. Inflation in July rose by 2.0 percent year-on-year, and the central bank warned that it would remain elevated through the first half of next year. The central bank unexpectedly raised interest rates in late July to address persistent inflationary risks stemming from the Middle East conflict, which has led to increased energy costs.

Of the respondents, 45 percent predicted that the nominal effective exchange rate (S$NEER) policy band would be expanded at the October monetary policy review, with the remainder stating it would likely remain unchanged.