Economists surveyed by Singapore’s central bank have raised their growth forecast for the city-state in 2026 while slightly lowering expected inflation, according to a report released on Wednesday. The Monetary Authority of Singapore (MAS) conducted the survey in August, receiving responses from 25 economists and analysts.

The median forecast for Singapore’s economic growth in 2026 was revised upward to 5 percent, a significant increase from the 3.5 percent projected in the previous survey conducted in June. Growth for 2027 was also revised higher, to 3.1 percent from the earlier forecast of 2.5 percent. Singapore’s economy expanded by 5.9 percent in the second quarter of 2026, surpassing market expectations. Reflecting this momentum, the Ministry of Trade and Industry earlier in August raised its growth outlook for the year to a range of 4.5 percent to 5.5 percent, up from its prior forecast of 2.0 percent to 4.0 percent.

On the inflation front, economists now expect core inflation—the rate excluding volatile food and energy prices—to be 1.9 percent in 2026, down slightly from the previous survey’s 2 percent projection. Headline inflation is forecast at 2.1 percent, also lower than the earlier estimate of 2.3 percent. Inflation in Singapore rose by 2.0 percent year-on-year in July, and the MAS has cautioned that inflationary pressures are expected to remain elevated through at least the first half of 2027.

The central bank surprised markets in late July by tightening monetary policy, citing ongoing inflation risks linked to the protracted conflict in the Middle East, which has contributed to rising energy prices. The survey revealed that roughly half of the economists identified the extended conflict in the Middle East as a major downside risk to Singapore’s economy. Additionally, about 29.4 percent of respondents highlighted the potential bursting of a bubble in artificial intelligence-related sectors as another significant risk.

Regarding monetary policy expectations, 45 percent of respondents anticipate that the MAS will increase the slope of the Singapore dollar nominal effective exchange rate (S$NEER) policy band at its scheduled review in October. The remaining economists expect the policy stance to remain unchanged.

The survey reflects a cautiously optimistic outlook tempered by geopolitical tensions and sector-specific vulnerabilities, underscoring the challenges facing one of Asia’s most trade-dependent economies.