SINGAPORE – Private-sector economists expect Singapore’s economy to expand by 3.5 per cent in 2026, just a tad weaker than their previous forecast, on slower growth in private consumption – a measure of spending by households on goods and services.
The latest quarterly survey of professional forecasters was sent out by the Monetary Authority of Singapore (MAS) on May 25, well before the United States and Iran agreed on June 14 on a 60-day ceasefire deal that is likely to normalise oil and natural gas flows from the Middle East.
In response to the ceasefire deal and amid hopes that shipments through the Strait of Hormuz would continue to increase in the coming weeks, crude oil and natural gas prices have dropped significantly and will likely ease further.
Survey respondents, who feared further escalation in the Middle East conflict before the US-Iran deal, also saw inflation in Singapore edging up, which may have led them to believe households would cut spending.
The forecast in MAS’ latest survey, down from 3.6 per cent in March’s survey, still sits at the higher end of the Ministry of Trade and Industry’s 2 to 4 per cent gross domestic product (GDP) growth estimate.
The Singapore economy expanded by 6 per cent year on year in the first quarter of 2026, slightly exceeding the survey’s median forecast of 5.8 per cent in the previous survey.
In the current survey, respondents expect the economy to grow by 4.3 per cent in the second quarter.
On the outlook for the rest of 2026, respondents were unanimous on possible upside for the economy from a sustained AI-led tech cycle upturn.
While respondents lowered their projection for private consumption to 3.2 per cent from 3.5 per cent, the impact on overall GDP growth was mitigated by higher growth forecasts for almost all other sectors of the economy.
The estimate for manufacturing was up at 5 per cent from 4.3 per cent. Finance and insurance sector was expected to grow at 4.5 per cent, up from 3.6 per cent.
Growth in construction was predicted at 6.5 per cent, up from 5 per cent. Wholesale and retail trade forecast was higher at 4.9 per cent, from 4 per cent, and accommodation and food services was expected to expand by 1.8 per cent, up from 1.3 per cent predicted in March.
For 2027, the forecast growth rate stood unchanged at 2.5 per cent.
The median forecast in the June survey for 2026 all-items inflation came at 2.3 per cent, higher than 1.5 per cent in the March survey. The median forecast for core inflation – which excludes private transport and accommodation costs to better represent household expenses – was also up at 2 per cent, from 1.5 per cent in the previous survey.
On the labour market front, respondents expect the overall unemployment rate – which includes non-residents – to remain at 2.1 per cent at the end of 2026, unchanged from the March survey.
On monetary policy, 38 per cent of respondents anticipated the MAS to further tighten its stance – seeking a stronger trade-weighted Singapore dollar.
The central bank will deliver its next monetary policy review in July.
