Singapore growth forecast raised to 5pc on strong AI demand, MAS survey shows

Singapore's economy is projected to grow by 5.0 percent in 2026, a significant increase from the previously anticipated 3.5 percent, according to the Monetary Authority of Singapore's (MAS) latest survey. The survey, which captured the views of 21 economists and analysts, indicates that the average outlook for the Singapore economy is a growth rate of 5.0-5.4 percent, with a 37 percent probability.

The economy grew by 5.9 percent year-on-year in the second quarter of 2026, surpassing the median forecast of 4.3 percent from the previous survey. The report highlights that sustained AI-driven growth in the technology sector is a major catalyst supporting Singapore's economic outlook. Additionally, the resolution or de-escalation of the West Asia conflict and robust global growth are considered important upside risks.

Conversely, the downside risks include an escalation or prolonged conflict in West Asia and the bursting of the AI bubble, which could negatively impact financial markets. The survey also projects Singapore's median GDP growth for 2027 at 3.1 percent. In terms of inflation, the Consumer Price Index (CPI)-All Items and MAS Core Inflation for 2026 are forecast at 2.1 percent and 1.9 percent, respectively.

The median forecast for CPI-All Items inflation in 2026 slightly decreased from 2.3 percent to 2.1 percent, while MAS Core Inflation reduced from 2.0 percent to 1.9 percent. The survey also forecasts a 2.1 percent unemployment rate at year-end, consistent with the June 2026 survey.