SINGAPORE - Private-sector economists expect Singapore’s economy to grow 4.1 per cent in 2025 and 2.3 per cent in 2026, higher than their previous forecasts, amid an improved outlook for exports, manufacturing, finance, construction, wholesale and retail trade.

The economists had earlier predicted Singapore’s gross domestic product (GDP) to increase by 2.4 per cent in 2025 and 1.9 per cent in 2026.

The latest estimates in the quarterly survey of professional forecasters by the Monetary Authority of Singapore (MAS) released on Dec 17 follows the Ministry of Trade and Industry (MTI) raising its growth forecast in November.

MTI

hiked its projection of growth in 2025 to about 4 per cent

from the 1.5 per cent to 2.5 per cent range it had forecast in August. In its first forecast for 2026, MTI said the economy is likely to grow by a slower pace of 1 per cent to 3 per cent.

Economists in the MAS survey saw the possibility of an upside to their forecasts if the AI-led technology upcycle is sustained, while global economic growth remains resilient and trade tensions continue to ease.

They still warned of downside risks to Singapore’s economic outlook if trade tensions escalate, or the AI bubble in the US stock market bursts. The latter could have negative spillover effects on the broader financial market and the global economy, they said.

Geopolitical tensions, including the introduction of semiconductor and pharmaceutical tariffs, have emerged as the foremost downside risk to Singapore’s economic outlook.

US President Donald Trump said in August that the US could initially place a “small tariff” on pharmaceutical imports, before hiking tariffs to 150 per cent within 18 months and eventually to 250 per cent in an effort to boost domestic production. He did not specify the initial tariff rate.

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