Economists Lower Singapore 2026 GDP Forecast to 3.5% While Raising Inflation Outlook: MAS Survey
Singapore Economy | BT / ST, Jun 18, 2026
Private-sector economists have trimmed their 2026 GDP growth forecast for Singapore to 3.5 per cent from 3.6 per cent while raising inflation projections, according to the latest quarterly survey by the Monetary Authority of Singapore. The poll, the first since the Iran conflict, also showed a growing minority of forecasters now expecting MAS to tighten monetary policy in July, though the majority still anticipate the central bank will hold its current stance.
2026 GDP Forecast
Previous Forecast
Inflation Outlook
MAS Policy Expected
Growth Forecast Trimmed to 3.5 Per Cent
The median GDP growth forecast for 2026 was lowered to 3.5 per cent from 3.6 per cent in the previous survey. Economists cited slower momentum in household spending and continued uncertainty from the geopolitical environment, including the fallout from the Iran conflict and global trade tensions.
Despite the downward revision, respondents noted possible upside from a sustained AI-led technology cycle that could lift demand for electronics manufacturing and related services. The construction sector’s growth forecast was also revised upward to about 6.1 per cent from around 5 per cent previously, supported by continued public infrastructure and private development activity.
Inflation Expectations Rise
In contrast to the softer growth outlook, economists raised their inflation projections for 2026. Both headline and core inflation forecasts were revised upward, reflecting persistent cost pressures in areas such as food, utilities and services even as crude oil and natural gas prices eased in recent weeks.
The upward revision to inflation forecasts, combined with the slight trim to growth expectations, presents a challenging backdrop for monetary policy. Analysts noted that the divergence between softer growth and firmer inflation could complicate the MAS’s policy calculus at its upcoming July review.
MAS Policy Outlook: Tightening Debate Grows
While the majority of survey respondents still expect MAS to hold its monetary policy settings at the July meeting, a growing number of forecasters now see a case for tightening. The shift reflects concerns that elevated inflation may persist longer than initially expected.
Some analysts argued that the recent easing of crude oil prices and a 60-day ceasefire agreement could reduce near-term inflationary pressures, supporting the case for the central bank to remain on hold. Others pointed to sticky services inflation and second-round effects as reasons for MAS to act pre-emptively.
The survey results come at a pivotal time, as Singapore’s open economy remains exposed to shifting global trade dynamics, evolving geopolitical risks and the possibility of renewed supply-chain disruptions.
Frequently Asked Questions
What is Singapore’s GDP growth forecast for 2026?
Private-sector economists surveyed by MAS now expect Singapore’s economy to grow 3.5 per cent in 2026, slightly lower than the previous forecast of 3.6 per cent. The downward revision reflects softer household spending momentum and geopolitical uncertainty, though potential upside from the AI-led tech cycle was noted.
Will MAS tighten monetary policy in July 2026?
The majority of survey respondents still expect MAS to hold its current monetary policy stance at the July meeting. However, a growing minority now sees a case for tightening, driven by concerns over persistent inflation. The outcome will depend on how inflation trends evolve in the coming weeks.
How does the Iran conflict affect Singapore’s economic outlook?
The Iran conflict has added to global uncertainty, affecting energy prices and trade flows. While a 60-day ceasefire has eased immediate pressures, economists remain cautious about the potential for renewed disruptions. The conflict’s fallout is one reason growth forecasts were trimmed and inflation expectations raised.
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