SINGAPORE: Private sector economists have raised their growth forecast for the Singapore economy this year to 4.1 per cent, significantly higher than their previous estimate of 2.4 per cent made in September.
The projection, released by the Monetary Authority of Singapore (MAS) in its latest survey of professional forecasters on Wednesday (Dec 17), is similar to the Ministry of Trade and Industry’s (MTI) forecast of around 4 per cent, and slightly lower than the 4.4 per cent growth recorded last year.
A total of 20 economists and analysts responded to the survey, MAS said.
The Singapore economy expanded by 4.2 per cent year-on-year in the third quarter of 2025, easily beating the respondents’ median forecast of 0.9 per cent in the previous survey in September.
In the current survey, the respondents expect the economy to grow by 3.6 per cent year-on-year in the final quarter of 2025.
Geopolitical risks, including an escalation in trade tensions and wars, were the most cited downside risk to the outlook for the Singapore economy. The economists also flagged the burst of the artificial intelligence bubble (AI), with spillovers to financial markets as well as external slowdown as a potential risk.
Meanwhile, most respondents cited a sustained AI-led tech cycle upturn as an “upside risk” to Singapore’s economic outlook, with resilient global growth and the easing of trade tensions as key upside risks.
Their inflation forecasts remained unchanged from the previous survey. The median projection for headline or overall inflation, measured by the Consumer Price Index-All Items (CPI-All Items), remains at 0.9 per cent for the full year.
CPI-All Items inflation excludes non-consumption expenditures such as purchases of houses, shares and other financial assets and income taxes.
Meanwhile core inflation, which excludes accommodation and private transportation costs, is forecast at 0.7 per cent, unchanged from the previous survey.
Nearly all of the respondents do not anticipate any monetary policy shift in the January and April 2026 policy reviews, MAS said.
About 11 per cent of respondents anticipate a tightening in the July 2026 policy review, via an increase in the slope of the Singdollar nominal effective exchange rate (S$NEER) policy band. In the previous survey, when none of the respondents expected any policy tightening in the first three policy reviews of 2026.
MAS uses the exchange rate as its main policy tool because Singapore is an open economy that depends heavily on trade.
The S$NEER refers to the exchange rate of the Singapore dollar managed against a trade-weighted basket of currencies from Singapore’s major trading partners.
For 2026, the respondents’ median forecast of gross domestic product growth for 2026 is 2.3 per cent, while overall and core inflation is expected to come in at 1.5 per and 1.3 per cent respectively.