Singapore’s growth outlook improves as MAS survey raises forecasts
Private sector economists in Singapore have nudged up their growth projections for the city-state, signaling a steadier expansion path for 2025 and 2026. In the latest MAS (Monetary Authority of Singapore) survey, economists forecast Singapore’s economy to expand by 4.1% in 2025 and 2.3% in 2026, higher than the previous projections. The upgrade reflects a more favorable outlook for key drivers such as exports, manufacturing, finance, construction, and wholesale sectors.
What is driving the upgrade?
The revised growth path hinges on several interconnected forces shaping Singapore’s external and domestic demand. First, a brighter export outlook is buoying momentum. Electronics, machinery, and other tradables are expected to perform better as global demand stabilizes and supply chains regain resilience. This improved export environment supports manufacturing activity, which in turn feeds into a broader economic cycle across services and business services.
Second, Singapore’s financial hub status remains a key growth engine. A stronger global financing environment, coupled with regional capital flows, underpins activity in banking, asset management, and related services. The finance sector’s resilience helps sustain domestic demand through investment and consumption channels.
Third, construction and wholesale trade are contributing to the upward revision. As property market demand stabilizes and logistics networks expand, construction projects—ranging from public infrastructure to private developments—are expected to contribute a meaningful, though moderate, lift to growth. The wholesale segment, spanning distribution, logistics, and trade services, also benefits from a recovering trade cycle and regional import-export activity.
Sector-by-sector outlook
Exports and manufacturing: With a more supportive global backdrop, Singapore’s tradables sector is anticipated to lead the 2025 expansion. The growth in exports should bolster local manufacturers, encouraging capex and productivity improvements that have a lasting effect on the economy’s supply side.
Finance and business services: As cross-border activity resumes and financial markets stabilize, demand for financial services, fintech, and advisory work is expected to stay robust. This helps buffer the economy against external shocks and sustains private-sector investment.
Construction: The construction sector could experience a pick-up driven by public projects and private development pipelines. While housing cycles and policy constraints may temper momentum in the near term, ongoing and planned projects support jobs and ancillary services.
Wholesale and logistics: Trade-related services, including distribution networks and logistics infrastructure, are poised to benefit from growing regional trade and e-commerce flows. This supports not only GDP growth but also employment in related industries.
Policy and strategic implications
The MAS survey’s upgraded outlook provides room for calibrated policy stances. With a stronger growth trajectory, policymakers may have greater latitude to balance inflation risks against the need to sustain a pro-growth environment. Structural reforms that boost productivity, attract investment, and enhance workforce skills will be crucial to anchoring the expansion across the mid-2020s.
Fiscal considerations will also matter. A steadier growth path reduces near-term fiscal pressures while enabling targeted investments in infrastructure, healthcare, and education that underpin long-term competitiveness. In this context, collaboration between the public sector and private enterprises will be essential to translate higher GDP growth into broad-based income gains and job creation.
What to watch in the coming quarters
Analysts will closely monitor the durability of the export upturn and external demand, as well as inflation dynamics that influence domestic consumption and wage growth. Exchange-rate movements, global supply-chain resilience, and regional economic developments will also shape how Singapore’s growth outcomes evolve through 2025 and 2026. Investors and policymakers alike should watch investment trends, productivity gains, and construction activity to gauge whether the upgraded forecast can be sustained.
Conclusion
The MAS survey’s revised growth projections reflect a brighter near-term trajectory for Singapore, supported by a rebound in exports, a resilient finance sector, and steady gains in construction and wholesale activity. While risks remain, a more favorable external environment and policy support could help Singapore achieve a stable, moderate expansion through 2025 and 2026, reinforcing its role as a regional economic hub.
