Singapore MAS survey shows economists lift GDP forecast, see steady policy

Economists, as per a Monetary Authority of Singapore (MAS) survey, have raised Singapore's 2024 growth forecast to 2.4% from 1.7%, reflecting a stronger-than-expected first half. Despite the improved economic outlook, the majority of forecasters anticipate the MAS will hold monetary policy steady at its October and January 2026 reviews, following earlier easing. Geopolitical tensions are cited as the primary downside risk, even as core inflation forecasts edged slightly lower.

Analysis

A recent survey by the Monetary Authority of Singapore (MAS) indicates a notable improvement in the economic outlook for Singapore, with economists raising the median growth forecast for the current year to 2.4% from 1.7%. This revision is underpinned by a stronger-than-expected performance in the first half and aligns with the government's updated 2025 growth forecast of 1.5% to 2.5%. Despite this optimism, the path forward is tempered, with Q3 year-on-year growth projected at a modest 0.9%. Crucially, the improved growth outlook is not expected to trigger a monetary policy shift; a majority of economists anticipate the MAS will maintain its current policy settings at both the October and the January 2026 reviews. This dovish stance is supported by a benign inflation outlook, as median core inflation forecasts have edged down to 0.7%, and the latest annual core inflation rate hit a three-year low of 0.5%. The primary risks to this forecast remain external, with geopolitical tensions cited as the main downside threat, while a potential easing of trade friction and a sustained tech cycle upturn are identified as key upside catalysts.

Key Decisions for Investors

• The combination of an upgraded growth forecast and an expected hold on monetary policy creates a constructive, albeit not aggressive, backdrop for Singapore-focused equities; however, the modest 0.9% Q3 growth expectation warrants a cautiously optimistic stance rather than an outright bullish one.
• Investors should closely monitor geopolitical developments and global semiconductor cycle data, as these have been explicitly identified as the primary external factors that could significantly shift Singapore's economic trajectory away from the current baseline.
• Given that core inflation is at a multi-year low and the MAS is anticipated to remain on hold through early 2026, there is little impetus for near-term appreciation in the Singapore Dollar or a significant rise in local government bond yields driven by domestic policy.