Singapore growth forecast cut as economists flag war risks, policy set to stay in July, MAS survey shows

SINGAPORE, June 17 — 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 per cent 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 United States and Iran on Monday, with 22 economists and analysts responding.

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

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

Singapore’s economy in the first quarter beat expectations with 6 per cent 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 per cent to 4.0 per cent.

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. — Reuters