Economists cut Singapore 2026 growth forecast, expect policy hold in July

SINGAPORE: Economists polled by Singapore’s central bank have slightly cut their growth outlook for the country for 2026, while six out of the 10 are also expecting monetary policy to remain unchanged next month, a survey showed on Wednesday.

Most of the respondents in the Monetary Authority of Singapore’s June quarter survey cited a prolonged or escalating conflict in the Middle East as one of the major downside risks for the city-state, while 15% of the economists flagged the potential bursting of the AI bubble.

The survey was sent out in May, before the ceasefire agreement signed by the US and Iran on Monday, with 22 economists and analysts responding.

The median forecast for growth this year dropped to 3.5% from 3.6% in the previous survey, with growth in 2027 projected at 2.5%.

Respondents expect core inflation for 2026 at 2% and headline inflation at 2.3%, higher than the 1.5% projected for both in the previous survey.

Singapore’s economy in the first quarter beat expectations with 6% growth.

The government, however, has warned that downside risks have risen significantly.

Last month, the trade ministry maintained its economic growth forecast for this year at 2.0% to 4.0%.

In April, the central bank tightened monetary policy due to the risk that the Iran war could fuel inflation. The central bank had held monetary policy steady at previous three quarterly meetings after easing last April.